Posted on 27 Sep 2023
Brazilian pig iron export prices have fallen, although insignificantly. The new agreements and sales closed at the end of the third week of September mainly with North American clients putting pressure on the market.
The recent agreements did not vary much in the final price compared to the last pig iron shipments to the US, as the drop of $5 per tonne was offset by an increase in the cost of freight by the same quantity, Kallanish learns from local sources.
"The gap between buyers' and sellers’ expectations is very wide since Brazilian producers remain firm in not accepting bids lower than $400/t," says a trader. "Market participants have begun to review their strategy ahead of the rainy season pushed by the practically zeroing profit margins."
Another source confirms that larger producers are considering reducing or temporarily stopping activity before closing new contracts at a price lower than they would need to cover their costs. “Maintaining normal levels of pig iron production with a market offering below $400/t for the material is becoming increasingly unviable, no matter how much demand there is. The activity itself is difficult when you add the growing energy and transportation costs during the rainy season [mid-October-January]," he observes.
According to market participants, two Brazilian cargoes for 50,000 tonnes each to the US were confirmed last week at $405-408/t fob, with freight cost at $30/t.
Source:Kallanish
