Posted on 06 Dec 2023
Brazilian pig iron export prices continue moving up in line with the recovery of global raw materials markets, Kallanish notes. Sources suggest that Brazilian sellers should further increase their export offers.
"Prices rose by some $5-10/tonne in last ten days on the back of last two fresh shipments to the US," one market participant comments. "Two cargoes of 55,000 tonnes each, for July shipment, [were] confirmed at the beginning of December. The deal preceded an expected new price upward adjustment in the North American scrap market."
According to another source, demand will continue to improve. "The value of scrap in the US is increasing, so it is considered that the market can pay more for Brazilian pig iron, whose price is still lower than the cost of production,” he observes. “Another factor that could trigger an increase in offers is China's restart of purchases from Brazil.”
Sources consider that the material price should be much higher than $435/t, to offset the exchange rate and the impact that the rainy season in the country. “The fair value today would be between $480-500/tonne to cover our costs. This is close to March’s level, during the last rainy season,” a producer explains.
Brazilian average pig iron export prices are currently at $425-430/tonne fob Brazil. Some producers are already offering material at $440/t fob, but no deals have yet been confirmed at this level.
Source:Kallanish
