The import basic pig iron (BPI) market in the US still lacks clarity after the imposition of 10 percent reciprocal tariffs that will be applicable to major suppliers like Brazil, Ukraine and even Asian countries. For now, import BPI prices are stable, but customers are likely to try to push for a decline in their next purchases, trying to compensate for some losses.
No deals have been reported for ex-Brazil BPI with 0.15 percent phosphorus content after contacts at $450/mt FOB done over 10 days ago. “I believe the prices will be around $440-450/mt FOB, and tariffs are for everybody, so it will not influence the price level,” one of the Brazilian producers said. Another seller said that he is uncertain about the direction the market will go in. Two other Brazil-based sources said that for now there are no fresh offers since, even if producers provide $10/mt discounts, it may not be enough for buyers to restart business. “Another issue is to deal with already signed contracts. I think for July shipments US buyers will target at least a $20/mt drop [on FOB basis from Brazil], as 10 percent is around $47.5/mt from the current price,” a source commented. For already signed contracts and material that will come to the US in the coming months, importers will pay this 10 percent tariff on their own, according to sources.
The reference price for ex-Brazil BPI has been corrected down slightly, by $5/mt on average to $440-450/mt FOB until business activity accelerates. Some discounts from Brazil may also be due to some slight depreciation of the local currency. The exchange rate has come to $1 = BRL 5.8-6 this week, versus $1=BRL 5.6-5.8 last week.
Another signal that the market is under pressure is the higher number of BPI offers from Brazil to Europe this week. “The Brazilians have sharply intensified negotiations on supplies to Europe. But both sides are bluffing. The EU has nowhere else to get pig iron (except for Ukraine). But Brazil also needs other markets as the US will not confirm $480-485/mt CFR NOLA to the Brazilians in the near future,” a source said.
The reference price for import BPI in the US has been corrected down by $5/mt over the past week to $470-480/mt CFR.