Pig Iron/Scrap Price Spread Hits 18-Month High
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The price spread between pig iron and No. 1 busheling scrap has reached its highest level since January 2023. This increase is due to the continued decline in U.S. scrap prices this month.
The difference between the price of basic pig iron (BPI) CFR New Orleans and the national average delivered price for No. 1 busheling scrap has risen to $110 per ton after the domestic iron scrap trade was settled last week.
The growing gap between these two electric arc furnace (EAF) feedstocks may support the price of basic pig iron, despite a downturn in the non-ferrous metals market, which puts pressure on pig iron sellers to reduce their offer prices.
While the nationwide price for No. 1 busheling scrap fell to its lowest level in 18 months this month at $373 per ton, the raw material scrap price drop did not keep pace with the decline in hot-rolled coil (HRC) steel prices, which fell to $730 per ton last week.
Demand for flat-rolled steel might decrease during the slower summer months, potentially limiting demand for raw material scrap despite significant drops in pig iron prices.
Lower scrap prices in the U.S. following the June trade settlement have begun to affect Brazil, the largest supplier of pig iron to U.S. steelmakers. Last week, U.S. buyers offered $460-465 per ton CFR New Orleans, although suppliers rejected these offers.
Brazilian pig iron prices have remained stable this year due to rising charcoal production costs, a critical pig iron input. Production constraints in Brazil, combined with reduced pig iron imports from Ukraine and Russia due to ongoing conflict, have limited supply, leading to stable prices amid a weak steel market.
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Nam Kim Steel, also known as Ton Nam Kim, is a leading producer of galvanized steel in Vietnam. They provide high-quality steel products for various industries, ensuring durability and reliability. Their galvanized steel is widely used in construction and manufacturing, known for its excellent corrosion resistance and long-lasting performance. Nam Kim Steel continues to innovate and meet the demands of both domestic and international markets. For more information about our products and services, please contact us directly:
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