PRICING NOTICE: Proposal to refine US, Brazil pig iron prices

Fastmarkets proposes to refine the specifications for three pig-iron price assessments in the United States and Brazil to reflect existing market conditions.

Fastmarkets invites market participants to take part in a market consultation to refine the specifications of the three prices below.

Fastmarkets has added the chemical compositions into the specifications to specify the phosphorous content of the pig iron, while payment terms and timings have been revised in line with current market conditions.

Between January and September 2018, the US imported 4.34 million tonnes of pig iron, according to the International Steel Statistics Bureau (ISSB). Russia and Ukraine, who supply low-manganese pig iron, together had supplied 3.66 million tonnes and held 84% of the US pig-iron import market.

Meanwhile, Brazil shipped 472,909 tonnes, ISSB reports, with around 160,000 tonnes of that volume supplied from the South of Brazil, where they export high-phosphorous pig iron. This made up below 4% of the US pig iron market, Fastmarkets estimates. The rest of the tonnage was imported from a key supplier in Northern Brazil, who ships low-phosphorous pig iron.

High-phosphorous pig iron is cheaper due to its quality and lower demand in the US.

Once the changes have been implemented, Fastmarkets will exclude prices of high-phosphorous pig iron from the import pig-iron market assessment in the US. This will cause a non-market upward adjustment, but only once.

High-phosphorous pig iron prices will be excluded from the export market assessment from Ponta da Madeira Brazil as well, which may cause a non-market upward adjustment.

In late June 2018, a pig iron manufacturing facility was restarted in northern Brazil. The producer makes pig iron with high-phosphorous content, compared to the key supplier in the north of Brazil. It has a 10,000-12,000-tonne-per-month production facility, thus appears in the market only once every three months when a cargo is combined.

Fastmarkets will specify the phosphorous content in the export market assessment from Vitória/Rio Brazil as well but it will not cause any non-market price corrections.

Current specification
Assessment: US pig iron imports $/tonne cfr
Dimensions: Min size: standard size
Quantity: 20,000-70,000 tonnes
Location: CFR Gulf of Mexico
Timing: Spot
Unit: USD/tonne
Payment terms: payment upon delivery, prepayment
Publication: Weekly. Thursday, 2-3pm London time

Revised specification
Assessment: US pig iron imports $/tonne cfr
Dimensions: Min size: standard size
Quantity: 20,000-70,000 tonnes
Location: CFR Gulf of Mexico
Timing: Spot
Unit: USD/tonne
Payment terms: Payment upon delivery
Phosphorous: =0.1%

Publication: Weekly. Thursday, 2-3pm London time

Current specification

Assessment: Brazil exports pig iron $ per tonne fob Ponta da Madeira Brazil
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: 6-12 weeks
Unit: USD/tonne
Payment terms: Upon delivery, in instalments
Publication: Weekly. Friday, 2-3 pm London time


Proposed specification
Assessment: Brazil exports pig iron $ per tonne fob Ponta da Madeira Brazil
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: Spot
Unit: USD/tonne
Payment terms: Payment upon delivery
Phosphorous: =0.1%

Publication: Weekly. Friday, 2-3 pm London time

Current specification
Assessment: Brazil exports pig iron $ per tonne fob Vitória/Rio Brazil
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: 6-12 weeks
Unit: USD/tonne
Payment terms: Upon delivery, in instalments
Publication: Weekly. Friday, 2-3 pm London time


Proposed specification

Assessment: Brazil exports pig iron $ per tonne fob Vitória/Rio Brazil
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: Spot
Unit: USD/tonne
Payment terms: Payment upon delivery
Phosphorous: >0.1%

Publication: Weekly. Friday, 2-3 pm London time

The consultation period for these proposed amendments will end one month from the date of this pricing notice, on Friday December 28, with changes taking place, subject to market feedback, from Monday December 31.

To provide feedback on the amendments outlined above, or if you would like to provide price information by becoming a data submitter to the United States or Brazilian pig iron price assessments, please contact Marina Shulga by email at: pricing@fastmarkets.com. Please add the subject heading FAO: Marina Shulga, re: US, Brazil pig iron prices.

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.metalbulletin.com/prices/pricing-methodology.html

Marina Shulga

marina.shulga@metalbulletin.com

Published

Marina Shulga

November 29, 2018

12:35 GMT

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