Prices for ex-Brazil basic pig iron (BPI) have inched down this week amid rumours about one deal signed at a slightly lower level after long-standing stability. In particular, one contract from the main Brazilian seller for pig iron with 0.15 percent phosphorus content has been rumoured at $430/mt FOB, versus the lowest previous deal at $435/mt FOB. Even though this transaction has failed to be confirmed by the time of publication, some small decline is not a surprise to market sources as availability at the Brazilian side is still high, while US buyers have been waiting for discounts after some worsening of sentiments in their local market.
“Material from Brazil is more or less available. Mills are not sold out too far into the future… In the USA, we are now in the hot phase of the election campaign. I think nothing will happen until then, maybe only a small reduction in prices,” a trader said. Another market source from Brazil said that he sees the market as relatively stable, but confirmed bigger pressure from the US mini-mills to lower raw material prices for October.
The rumored deal at $430/mt FOB from Brazil translates to about $460/mt CFR New Orleans or just slightly below, which was sought by customers in late September.
However, market sources do not believe that prices for pig iron from Brazil will drop much more from the current level as “the next argument to keep the price on that level will be the beginning of the rainy season in Brazil,” a source commented.