Prices for basic pig iron (BPI) in the global market have softened over the past week, following the downtrend seen in the scrap segment. Even though most offers have declined, and the long pause in development in the US market has started to change slowly, the recent price declines have not been enough for most buyers. So, trading has remained limited in the major outlets.
In the US, ex-Brazil offers have fallen from the previous $560/mt CFR to $550/mt CFR New Orleans. However, “buyers are willing to pay only around $525-530/mt CFR,” an international trader said.
There has been rumor about a 30,000 mt sale of ex-India BPI to the US with the price heard at $498/mt FOB. The freight from India to the US has been assessed at $45-50/mt, so the CFR price should translate to $543-548/mt. However, most major sources in the market, even though hearing about the deal, have been not able to confirm it, with a number of traders believing the contract “is old, not this week for sure,” one of the Asian sources said. “This price is too high for the current market,” a European trader said. Moreover, there has been information about bids coming to Indian sellers not exceeding $480/mt FOB this week.
As a result, the reference price for import BPI in the US has been settled at $530-550/mt CFR, down by $20/mt on average over the past week, taking into account the fresh offers and bids in the market.
The situation in the import BPI market in Turkey and Europe has worsened further with the latest deal for scrap signed below the $400/mt CFR mark in Turkey. In such conditions, ex-Donbass BPI offers have lost $10/mt over the past week, coming to $360/mt FOB. This price translates to $390/mt CFR Turkey or so. But “the market is almost frozen now. There are no buyers for pig iron, while scrap is falling,” a Turkish trader said.
“The major Russian mill could insist on $420/mt FOB, but this price means nothing. I would say even $400/mt FOB will not work now,” another trading source said.
The SteelOrbis weekly reference price for ex-Black Sea BPI has been reduced to $360-400/mt FOB, versus $370-400/mt FOB last week.