Prices for ex-Brazil basic pig iron (BPI) have failed to decline in the latest deals, though the major US buyers had expected they would. Two more deals have been reported since late last week, proving that, even though sentiments in the scrap segment are still negative, US mills have failed to push BPI prices down, at least in this round of bookings.
Two deals for 50,000 mt each have been heard for ex-Brazil BPI with 0.15 percent Fe content at $430/mt FOB, translating to $460/mt CFR New Orleans. Some sellers reported the level at $5/mt higher than this, while a few traders are sure that excluding financing the price was at $425/mt FOB in the last two deals. In any case, all major market sources assess the recent deals as having been done at a “stable level.” US buyers initially were pushing prices down to $440/mt CFR.
“When considering recent dynamics and the current outlook, I wouldn’t be surprised to see even lower numbers soon. There are some market participants seeing a drop in prime up to $50/mt in March trade, too high as for me, but even a S30/mt drop would likely materialize in lower pig iron prices next month,” a trader commented.
However, from the Brazilian producers’ point of view, even though the mood is negative, there is almost no margin after increased production costs.
As for BPI with lower phosphorus content, the tradable level has been close to $480/mt CFR in the US, translating to around $450-455/mt FOB Brazil. The latest ex-Ukraine BPI contract for pig iron with 0.10 percent of phosphorus or less has been done at around $480-483/mt CFR versus the previous level of $485/mt CFR for a sale from another Ukrainian supplier reported earlier.