Export activity of US scrap collectors is at its height now. Suppliers intend to take full advantage from buying activity in foreign markets and sell leftover of their ferrous scrap with maximum profit. As a result, HMS 1&2 (80:20) is available from ports of US east coast at $475-480/t FOB against $445-450/t FOB in late December. Shredded scrap is currently quoted at $480-485/t FOB, $30/t up from the end of last month. Quotations of higher-quality P&S material have also reached new highs –$485-490/t FOB east coast, $25/t up in two weeks. HMS 1&2 (70:30), which is least in demand, is offered at $470-475/t FOB against $440-445/t FOB in late December. US traders believe that export quotations of scrap will keep growing until late January, as new contracts with foreign buyers are expected. Demand for the material is high also in the US domestic market. This week steelmakers have raised their purchase prices by $60-70/t, striving to buy local scrap, while its supply is falling rapidly. Some producers need the material to fulfil orders for finished products so much that they are forced to import it from Europe.
Pig Iron
By the moment Russian suppliers have managed to gain the highest profit, having signed the most recent contract at $550-555/t C&F New Orleans. The material of February production will be reportedly delivered in March. At the same time, some Russian exporters maintain desired price levels, announced in late December – $575/t C&F New Orleans. Current prices only surprised customers three weeks ago, but now these levels seem to be more reasonable. Noteworthy, the material will be shipped by Russian suppliers in March and will be delivered by Panamax ship, the cost on FOB terms is $550/t. Currently suppliers from Brazil are ready to deal at $550/t C&F with late March-April shipment. Notably, market participants forecast low utilization rates of BFs (30-35% from designed capacity) will remain for at least one or two months due to heavy rainfalls, which significantly complicates charcoal supply to plants. The latest deals for Brazilian material have been made at $525/t C&F. The material will be delivered in March from northern ports of Brazil, where its prices are about $507-510/t FOB Ponta de Madeira.
Brazilian Market
Upward trend continues in both export and domestic iron ore markets in Brazil. 64.5% Fe fines have gained $10-11/t this week and are being shipped at $162-163/t FOB Rio de Janeiro ($180-181/t C&F northern ports of China). At the same time, lower-quality material (62% Fe) is offered at $145-147/t FOB. Notably, the difference in prices, which depends on the quality, is determined in the following way: 1% = $5. As for long-term agreements, Vale has reportedly raised contract prices for January-March 2011 by 8-9% against similar levels in September-November, and thus the material will be shipped at $145/t FOB.
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