Buying activity in the global basic pig iron (BPI) market has almost dwindled to nothing, with most buyers having opted to adopt a wait-and-see stance due to controversial sentiments towards the future developments in the steel segment. Accordingly, the recent gains in scrap deal prices in Turkey have endeavoured global pig iron suppliers to expect higher prices likewise, however the general economic fundamentals have continued to undermine any chances. “Market sentiments are actually worsening, even though some Turkish EAFs would start replenishing their stocks starting from next week. I am afraid the macros will beat out the micros and the success will turn out to be just a tiny storm in a cup of tea,” an international trader stated. “The real threat of a global recession is looming around almost every corner and we actually see something like the "perfect" adverse storm out there, with skyrocketing energy costs, high inflation, fading demand and new Covid variances, all at the same time, while Chinese real estate and property markets are showing severe overdebted burdens on top of that, further curtailing steel demand all over,” he added. Meanwhile, CIS-based second-tier BPI suppliers appear to have become less aggressive in their offerings, though still much lower price levels targeted by Brazilian and Indian BPI suppliers. According to reliable sources, the most recent BPI offers from producers based on Ukrainian territories temporarily occupied by Russia have been voiced not below $410/mt CFR to Turkey, $30/mt down from the lowest deal price heard as done in Turkey. “I have heard Tula ships material on joint sales without any price fixing. Russian suppliers have no other option rather than to be highly accommodated to the customer”, a Europe-based trader commented. Besides that, BPI offers from so-called non-sanctioned producers like NLMK and Ural Steel have been heard at $500/mt CFR lately, in line with offers voiced earlier. The European customers have remained quite cautious towards bookings of ex-Russia material due to the potential risks due to sanctions.
Consequently, the competitiveness of Indian and Brazilian BPI producers in the global market has remained reasonably low. “I believe we will have a great production reduction in Brazil due to unworkable production costs,” a Brazil-based BPI seller stated. The latest levels voiced by a Brazil-based supplier have been heard at $565/mt FOB.
Meanwhile, a major India-based BPI exporter Vedanta is said to have once again failed to achieve any workable bids during its export auction. In the domestic market in India, BPI producers have succeeded in increasing prices to INR 48,500/mt ($607/mt) ex-works in the beginning of the current week on the heels of lower scrap availability, though by the end of the week prices have been adjusted down by INR 300-400/mt ($4-5/mt).