Posted on 18 Jan 2019
Brazilian pig iron producers have lowered their export prices in the first weeks of January following the volatility in international raw material prices. After almost two months of being stable, most traders have reduced their offers by $20-25/ tonne, Kallanish learns from market participants.
The market is anticipating a new downturn adjustment in the short term after confirming poor demand mainly from the US and Mexican markets. “Traders foresee that it will be very difficult [... for the market] to turn and recover to the higher pig iron prices seen at the end of 2018 in the short term. A lack of material was preventing prices from moving down, but US demand meanwhile fell. The lower North American bookings pushed local producers to downgrade their prices since the beginning of the year,” an international trader says.
The Brazilian market remains pessimistic for both pig iron production and exports for 2019, a market participant suggests. “Export prices have reached their lower level in the last year. The outlook for both production and exports is for a further decrease in 2019, sources say. “International raw material price volatility and new trade barriers are bringing a lot of uncertainty to the market. The Brazilian pig iron producers currently are stopping investments [... intended] to improve their production capacities”.
Brazilian export pig iron prices are now reported at $320-325/t fob Brazil.
