Business activity in the global basic pig iron (BPI) market has slowed down by the end of February, following sufficient restocking done previously. While most key buyers prefer to take a pause for now, the suppliers remain bullish, referring to the limited allocation.
According to sources, the main CIS-based BPI producers are fairly full with orders for March production, with latest deals sealed with US customers. Last week, Russia’s NLMK sold around 50,000 mt to the US at $347/mt CFR, while approximately the same price was fixed for a 60,000 mt lot from Tulachermet. In Italy, offers from the CIS have inched up by $5/mt over the past week to $345-350/mt CFR Maghera, with no decent trade reported as buyers are still sitting on sufficient stocks, while the suppliers are not under much pressure to sell. Turkish mills have been largely inactive as the price correlation between premium scrap and pig iron is mainly not in favour of the latter. However, according to sources, a 5,000 mt lot has been recently booked at around $345/mt CFR Turkey or $330/mt FOB.
As of today, ex-CIS pig iron prices are estimated at $325-330/mt FOB levels, vesus $320-325/mt FOB a week ago. The maintenance announcement by Tulachermet has raised some worries regarding the overall limited allocation in the market. However, the sources mainly expect Brazil to largely compensate for any possible reductions. “By April, the monsoon will be already over and BPI allocation from Brazil might be higher than usual. So I don’t expect any noticeable impact on the prices from Tula’s temporary absence”, a market insider said. “There could be some support from lower CIS supply. But I’m afraid the negative influence from the coronavirus concerns may be much higher,” another source stated in evaluation of the situation. It is worth mentioning that Brazilian suppliers are expected to resume offering BPI for export next week. Their latest deals were closed at $315/mt FOB from the south of the country.