US-based basic pig iron (BPI) importers have been trying to push prices down this week amid expectations for scrap prices to move down by $20/mt for July. These attempts have been supported by rumors about two deals for ex-India material at lower prices. However, the main BPI sellers to the US - the Brazilian mills - are still strongly resisting any declines.
One or two contracts for ex-India BPI with phosphorus content of up to 0.15 percent are rumored to have been done to the US market as $465/mt CFR and some sources have quoted even $5/mt lower. There has been no confirmation of the deal or deals having been done, though most market participants have heard the rumors in question. On the one hand, this was level desired by the major US mill and could be possible, given the weak steel market in India. On the other hand, “domestic prices in India are much higher than that, so why would they export below those levels?” a US-based source said, adding that another US mill has been trying to get $470/mt CFR for the same grade this week but failed, as most offers have not been below $475/mt CFR.
In any case, the rumors about alternative pig iron sales have shaken the market, which had been stable lately, and the SteelOrbis reference price has moved down to $465-480/mt CFR, down by $5/mt over the past week.
However, the position of Brazilian mills has not changed. “Brazil is underpinned by costs, so most likely the effect [from lower scrap prices in the US for July] will be limited,” a trader said. The previous deal for BPI with phosphorus content of up to 0.15 percent was at $445/mt FOB two weeks back. At the same time, there has been more talk about a new deal for ex-Brazil BPI at $470/mt CFR for August shipment this week, which translates to $445/mt FOB or so. But the reported seller has not replied by the time of publication.