Raw Material Prices
RMU: Global shifts pressure alternative iron prices
Written by Stephen Miller
September 20, 2024
Pig iron markets have held their ground. The last round of buying for the US resulted in a modest drop in prices for Brazilian pig iron.
Current pricing is $465 per metric ton (mt) CFR for high-phosphorus (0.15% max) and $475/mt for low-phosphorus (0.10 max) material. These prices were down just $5-10/mt from previous bookings.
US buyers do not want to pay these prices in the next round of buying since the domestic scrap market continues to be weak. But Brazilian producers have the rainy season with which to contend. Also, there may be competition from new buyers abroad.
As previously mentioned by RMU, Europe still buys most of its pig iron from Russia and Ukraine, so Brazilian material is overwhelmingly sold into the US. If Europe relied even to some degree on Brazilian stocks, a shortage for the US could be expected.
There is a quota on the European importation of Russian pig iron. As things move toward the last quarter of 2024, we understand the quota has been exhausted. If the Eurozone can’t source further from Russia and looks to Brazil for supplies, there could be some price competition with US buyers.
RMU reached out to an industry veteran about this possibility. He acknowledged that European buyers have been inquiring about pig iron in Brazil, but no business has been concluded thus far. There are currently cargoes available for November shipment, even though some channels already have commitments for November. He added that European and US mills will probably compete for cargoes next year when the Russian quota decreases again before it drops to zero in 2026.
There may be some new suppliers which could mitigate the potential supply crunch. One of our mill sources claimed to have received offers from South Asia at $440/mt CFR USGC Ports. Since then, at least one offer has dropped further into the $420s. That’s over a $40/mt difference from recent purchases from Brazil. We have not heard of a booking yet, but rest assured, RMU will be keeping an eye on this and keep you updated. Even with these potentially lower prices for pig iron, the premium over #1 Busheling is $75-85/mt calculated on a delivered works basis.
Editor’s note: This column appeared first in Recycled Metals Update (RMU), SMU’s new sister publication. RMU is devoted entirely to the ferrous and nonferrous recycled metals markets. If you’d like to learn more, visit RMU’s homepage and register for a free 30-day trial.
Stephen Miller
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