Venezuelan export prices for hot-briquetted iron began declining starting mid-May for June bookings following lower iron ore and scrap prices in the international market and greater availability of HBI for export, trading sources said.
S&P Global Platts' latest monthly Venezuelan HBI export price assessment fell by $15/mt to $195/mt FOB for June bookings, based on a lower range of $190-$200/mt of bids, offers and deals. The previous monthly assessment was based on a range of $200-$220/mt FOB.
The cargoes closed in May were mainly destined for Europe and Mexico, traders said. One cargo was sent to the US.
One European trader said he exported a cargo to the US at $265/mt mt CFR, Mobile, Alabama, supplied to Steel Dynamics. This deal was confirmed with company sources.
Sources said the value compared nicely against No. Heavy Melt Scrap delivered mill.
"We are thinking about exporting other cargoes to the US, in the end of June or beginning of July. But that is not confirmed yet," the trader added.
The same company expects to ship around five cargoes in June -- one confirmed from BriqVen in the beginning of the month and another DRI cargo from Sidor by the end of June.
"We loaded a combined cargo from Orinoco Iron and FMO, and another 33,000 mt from Orinoco Iron in May," he said. "Prices dropped below as much as $192/mt FOB, and we even negotiated something at $188/mt FOB."
Venezuelan suppliers do not comment on deals.
An Italian trader said he had also heard prices were falling in the past few weeks, indicating levels of $190/mt or $192/mt, up to $195/mt FOB.
One US trader said he could resume trading of HBI. "In the past years, US trading companies would charge more [for bringing in Venezuelan material] than general South and Central American traders would, because it was very risky, and you'd put that risk in your price," he said.
The US market could be an ongoing destination for Venezuelan HBI due to high pig iron prices and a scarcity of Brazilian supply. Sources said that most of Brazil's pig iron producers were sold out up to July, making HBI a reasonable solution for those needing material more quickly.
Another European trader confirmed exporting one cargo from Venprecar to Europe in May, and expects to close at least two more cargoes this month.
Sources confirmed a few vessels were currently loading at Palua port, with destinations in Portugal and Spain. Common destinations in the region are generally Turkey and Italy.
"Scrap prices decreased a bit in Italy in the past month and with the downturn of HBI prices, it may be a good time to purchase the material," the Italian trader said. "The spread between HBI and some ferrous scrap is at around $20-$30/mt."
Sources said producers were waiting to see higher prices and were negotiating toward that end.
"Producers want their prices to be higher than $200/mt FOB, and are trying to push prices up," a source said. "Current price levels -- below the $200/mt FOB mark -- do not interest producers as much as buyers, but it is the current market price."
A UK-based trader said that Turkey was "sending mixed signals and not demanding much HBI from Venezuela. Appetite in Turkey is smaller than in previous months."
He added it was unclear if "its steel making activities are lower, but scrap prices kept rising when they should had returned to previous prices."
During the S&P Global Platts survey from May 31 to June 5, one trader closed a deal at $188/mt FOB and eight market participants reported hearing prices at $190/mt FOB Venezuela, followed by three at around $195/mt, and 11 at $200/mt. Three sources indicated values at $200/mt FOB, and another three at $220/mt FOB.
Most of the offers, bids and deals involved volumes of 25,000-33,000 mt of HBI. Traders were contacted in Venezuela, Central America, the US and Europe.
