US pig iron market is strengthening

US pig iron market is strengthening as demand is increasing and prices are going up.

Due to the significant December/January scrap price increases and limited supply of domestic scrap, US mills have been purchasing pig iron to substitute scrap for steel production. Moreover, there is limited amount of Direct Reduced Iron (DRI) and Hot Briquetted Iron (HBI) available for export to the US. Therefore, demand and pricing for pig iron in the US are increasing.

Pig iron supply is poor in Brazil, which is one of the major pig iron exporters to the US. Brazilian pig iron mills are currently operating at about 60 to 65 percent capacity, and it is not expected that the closed pig iron mills in Brazil will resume operations soon. As a result, Brazilian pig iron prices are going up. Currently, Northern Brazil pig iron is offering at $370-375/mt CFR Nola.

The latest statistics show that total amount of pig iron imported into the US in November 2009 was 328,321 mt, representing an increase of 94,054 mt when compared to the figure of 234,267 mt in October. The main pig iron import sources for the US during November were: Brazil, at 148,346 mt; Russia, at 112,936 mt; Ukraine, at 49,500 mt; Canada, at 12,229 mt; and South Africa, at 5,301 mt.