Brazil pig iron market activity picks up

However, an executive with one of the larger channels in South Brazil told SMU his producers did sell one cargo to the US at the same price as they received for October. That is $383 per metric ton (mt) FOB Brazil ($410/mt CFR before tariff). 

Additionally, a trader in Brazil informed SMU another channel in Brazil sold two smaller cargoes to buyers from other than the US.

He said there was a 30,000 mt cargo sold to Italy at $415/mt CFR and another similarly sized cargo to a Mexican buyer. The price for the Mexican cargo was not disclosed. The Italian cargo represented a serious drop in pig iron prices on an FOB Brazil basis.

Our source in Brazil estimated this price to be $375/mt FOB or less, a decrease from previous bookings. 

What it means

What is significant about these new diversified bookings is it is the first time in well over a year a full cargo of basic pig iron was sold away from the US to Europe.

Also, it is reported US buyers are seeking another cargo from Brazil for December shipment. It is unclear if the Brazilian producers will sell more tonnages at this new price level. 

Italy had been previously sourcing pig iron from Ukraine, Russia, and India. The Ukrainian producers had recently boosted their offers to $420/mt CFR. In this case, the buyer in Italy decided to book Brazilian material at a lower price. 

This may put a floor on the price US mills can continue to source Brazilian pig iron and prices may firm up for further December and January shipments.