Merchant pig iron producers in southeastern Brazil
recently reached a deal to sell low-phosphorous material to a
U.S.-based steelmaker for the first time in several months.
"The deal has been
reached but there are still no details about the final volume,"
one source involved in the negotiations said.
At least 50,000 tonnes
of Minas Gerais pig iron with a maximum 0.1-percent phosphorous
content are expected to be shipped to the Port of New Orleans
at the beginning of November for $405 per tonne c.f.r., several
sources in Brazil and the United States told AMM
sister publication Steel First Sept. 11.
"There may be more
material to be added to the cargo, so in the end it could be a
Panamax vessel with as much as 70,000 tonnes instead of a
Handymax with 50,000 tonnes," the source involved in the
The f.o.b. price will
therefore vary according to the vessel and its corresponding
freight rate, but it is expected to be somewhere between $375
and $385 per tonne, different sources said.
"The price in the U.S.
has now stuck at $405 per tonne," one U.S. trading source
Some producers are
asking for as much as $408 to $410 per tonne c.f.r., which is
"pretty ambitious," a second U.S. trading source said.
The $405 c.f.r. price
is the same achieved a couple of weeks ago by producers from
Brazils northern region of Carajás for October
shipment for the same grade material.
pig iron usually has a higher phosphorous contentas much
as 0.15 percentwhich isnt accepted by the majority
of U.S. steelmakers. Nucor Corp.s Hertford County, N.C.,
plant is considered one of the few to use this type of material
in the country.
But sources dont
expect deals for low-phosphorous Minas Gerais pig iron to the
United States to become common in the near term.
To begin with, there
is limited port capacity in Brazils southeastern coast,
which in the case of pig iron consists mainly of the Rio de
Janeiro port and Terminal de Produtos Siderúrgicos
Another option could
be the Paul Gusa terminal at Vitória port, which is near
TPS, but there is still no customs authorization to use the
There is also limited
supply of high-quality, low-phosphorous lump iron ore in Minas
Gerais, which is necessary for the production of
low-phosphorous pig iron.
"I dont know if
the (Minas Gerais) producers will be able to produce that much
volume of 0.1-percent phosphorous pig iron," a source at a
Carajás pig iron producer said.
Carajás producer agreed. "I dont think they will
become competition for us," he said.
Most of the Minas
Gerais pig iron output is sold domestically to Brazilian
Independently of how
many other export transactions will be closed over the coming
months, the fact is that the Minas Gerais pig iron market
hasnt been as busy as it is now for a long time.
great news for the producers," a trading source said.
A version of this
article was first published in AMM sister publication Steel