The situation in the US import basic pig iron (BPI) market has not become clearer this week after numerous speculations last week. The general mood is still negative due to expected decline in the local scrap prices for June and at least one deal has been confirmed at lower level for alternative pig iron supplier. At the same time, Brazilian sellers, who are not in hurry to sell, hope for some rebound for August shipment material.
The latest deal for 20,000-25,000 mt of ex-Angola pig iron with phosphorus content not below 0.15 percent has been done at $460-465/mt CFR to the major US buyer, according to a number of market sources, though some initially claimed that the price was a bit higher - up to $475-465/mt CFR. The previous tradable level for this grade was at $475/mt CFR for ex-Brazil material. One of the reasons for such a low price has been that the material is for June shipment and alternative origin, but in general, this deal reflects the bearish moods among market sources. “The market has been quiet, but I expect it to soften with the next trades,” an importer from the US said.
No confirmed deals have been reported for ex-Brazil pig iron over the past week, but the rumors about a sale at $485/mt CFR for high-phosphorus BPI have been still there. Some market sources believe that the price is too high and can’t reflect the real situation in the spot market, and if done, included some special conditions. In such situation, the latest price for ex-Brazil BPI with 0.15 percent phosphorus content has remained at $440-450/mt FOB, again stable. “Currently I see the price for basic P15 pig iron at $445/mt FOB and expect a small drop by around $5/mt,” a market source said. Another Brazilian source said that the trading was quiet “with negotiations expected to be resumed next week". However, one of the Brazilian producers said that he expects demand for pig iron to improve for August-September arrival.
At the moment, taking into account the latest deals and tradable levels, the reference price for import pig iron prices in the US has been corrected down by $10/mt from the lower end to $465-485/mt CFR.
“The market sentiments are sliding further with sluggish US HRC market and June scrap trade heading south. Iron ore prices are dropping further and fundamentals remain pretty weak. To cut the long story short, it seems all mills [producing pig iron] arrived in reality and no space for price increases at all,” a trader said.