Prices for ex-Brazil basic pig iron (BPI) have increased slightly in the latest deals done to the US. The contract prices were close to the sellers’ targets voiced over the past week and have been accepted by US buyers due to the high production costs of pig iron suppliers, rather than due to a big improvement in the market mood.
A deal for 50,000 mt of ex-Brazil 0.15 percent phosphorus content BPI has been closed at $407-408/mt FOB for December shipment, while another similar tonnage has changed hands at $410/mt FOB. The previous transactions were close to $400-404/mt FOB, while sellers were targeting $410/mt FOB, as reported last week. “This is a positive sign as the higher prices have been achieved,” one Brazil-based source said.
“BPI is at a 1.09 ratio versus prime scrap [in the US], so it still makes sense for the US mills, since $407-410/mt FOB is just a sense of goodwill to respect the higher cost of production during the rainy season in Brazil, knowing that Russian pig iron is out and Ukraine has limited allocation,” an international trader said. However, in general the outlook has remained sluggish as demand in the US is depressed by the ongoing UAW strikes, while monetary policy is impacted by high interest rates and persistent inflation. Moreover, the war between Israel and Hamas is putting oil and gas prices at risk, sources said.
The recent ex-Brazil deals translate to $437-440/mt CFR, adding the freight, while ex-Brazil low phosphorus BPI is offered at $450-455/mt CFR New Orleans.