In mid-June, SteelOrbis reported offers for basic steelmaking pig iron from Brazil to the US at $325-340/mt FOB Southern Brazil port and $345-360/mt FOB Northern Brazil port.
A producer in the southern region recently concluded a deal with a US mill at $325/mt FOB for 30,000 mt of basic pig iron for August shipment. With lower summer ocean freight rates of $15-20/mt from the region to the US, this price presently translates to $340-345/mt CFR US port (New Orleans). This deal price is $15/mt lower than the previous deal concluded in May.
According to sources, the northern region is lagging in negotiations as output under discussion is for September shipments. The last deal from the northern region was concluded at $360/mt FOB Brazilian port in early May. Given the recent deal, the northern region is expected to close deals at $330-340/mt FOB Northern Brazil port that would result in $340-350/mt CFR US port due to customary freight charges of $10/mt from the closer region. Such a deal from the northern region would result in a price loss of $20-30/mt in FOB terms compared to the May deal. A source noted that demand for prime grade scrap in the US will continue high and northern Brazil producers could negotiate a slightly better position than the latest southern deal as delivery would be for Q3 which could encounter a seasonal upswing in US domestic scrap prices.