The continuing uptrend in the scrap segment and the lack of strong supply have continued to push up Brazilian basic pig iron (BPI) prices, with two deals rumored at slightly higher levels. At the same time, demand in most other major markets has been slack and supply from Russia has been easing.
Two contracts for ex-Brazil BPI with 0.15 percent of phosphorus have been reported as done at $428-430/mt FOB this week, according to a number of market sources, and at least one of them has been confirmed the deals, including financing costs of around $4/mt. The previous deals were reported at $422-424/mt FOB, as SteelOrbis published last week. “This is a trader who took a position for January, so it is still unclear if he will win or not. This is the trader’s risk,” a market source said about one of the contracts. Taking into account the freight to the US and some additional expenses, traders will target not below $460/mt CFR New Orleans in the next contracts.
The increases in BPI prices have not been surprising, given the forecasts for local US scrap prices, which are expected to settle up by $20-$30/gt in December. “The equilibrium in the Brazilian pig iron market remains unchanged. The US is determining the benchmark for seaborne BPI, due to apparent restocking. But there are no big increases at all and I have my doubts we‘ll see significant increases over next month,” a trading source said.
There has also been a rumor about the return of the Indian pig iron exporter and a sale of 50,000 mt of BPI at $420/mt FOB for the US also, which may translate to $457-460/mt CFR. However, some market sources said that the lot is still unsold.
As a result, the SteelOrbis daily reference price for imported BPI in the US has settled at $460-465/mt CFR, as offers for ex-Brazil 0.10 percent of phosphorus BPI are at $435-440/mt FOB at the lowest.
At the same time, the ex-Black Sea BPI market has remained silent mainly amid a lack of supply. The tradable level has increased indicatively from $355-365/mt FOB two weeks back to $360-380/mt FOB Black Sea. After sizable sales (at least 70,000 mt) to Turkey at near $380/mt FOB for higher quality BPI from Russia in the middle of November, sales to this destination have been slower. However, “with the current scrap price at above $400/mt CFR, pig iron [price] should be higher,” a trader said. Offers from Russia are rare and not below $380-400/mt FOB. “There is nothing available to assess. Donbass mills do not have availability and Russia may have but has withdrawn offers for now,” a trader in Europe said.