Today, November 17, information about two sales of ex-Ukraine basic pig iron (BPI) done to the US has leaked to the market, though it has left a lot of doubts and questions behind. Specifically, first a deal for ex-Ukraine BPI was heard at $555/mt CFR Port of Toledo, though later it was reported that a cargo for 20,000 mt apparently changed hands at $525-530/mt CFR Port of Toledo, for November-December shipment. Nevertheless, even the latter price is exorbitantly high compared to those valid for ex-Brazil BPI. Meanwhile, one more cargo of BPI produced by another Ukrainian producer has reportedly been booked by the major US distributor at $510/mt CFR. It is noteworthy that costs for transportation are usually around $20/mt higher compared to the Port of New Orleans. “It is really hard to believe. Ex-Brazil pig iron is at $480/mt CFR and they [Brazilian suppliers] cannot find buyers. What was the reason for paying a price so much above the market level I do not have any clue,” a major international trader stated. “Something must be behind these deals. It is obviously not a market level,” another big trader commented. “We are offering ex-Vietnam BPI with similar specification to Brazil for January shipment at under $500/mt CFR and there is zero interest. All customers are bidding in the low $400s/mt CFR,” a trader stated. Apparently, with the gap between pig iron and busheling scrap, which is the closest counterpart for BPI, having reached almost $200/mt in the US, pig iron bookings are not now worthwhile economically.
In the meantime, one Brazilian supplier has increased BPI offers to $500/mt FOB from $480/mt FOB, citing limited costs for production and an anticipated decline in output. “More than 20 furnaces will stop operations by the end of the year,” a source stated. With the freight costs being around $30/mt, the CFR price might be $530/mt CFR Port of New Orleans, while a few traders have stressed that in reality it is possible to get $480/mt CFR for Brazilian BPI, though there are “no buyers at all”.