Sentiment in the global basic pig iron (BPI) market has worsened this week since, even though a number of sellers have remained bullish, there has been a lack of deals at the previous levels or near to seller’ new targets.
Offers for ex-Brazil BPI with 0.15 percent phosphorus content have remained at $460/mt FOB and no new deals have been done after the one reported by SteelOrbis last week at $449-450/mt FOB to the US. “There has not been any new deal [for pig iron in the US import market]. Everyone has been waiting for US scrap price to settle this week,” a trader said. Another international trader stated, “A decline is more likely now than an increase if I were to bet.” However, one Brazilian mill has again mentioned increased costs of production and the lack of a significant drop in US scrap prices so far as the reason for expected firm BPI prices in the near future.
One of the Turkish mills was in the market looking for pig iron other than Russian origin, which is considered to be toxic due to sanctions. Ex-Brazil offers have been assessed as being too high and a deal has been signed with an Indian seller at $435/mt FOB, according to market sources. The buyer has not confirmed this information, though a number of traders are confident that the deal was done on FOB basis.
The SteelOrbis reference price for ex-Black Sea BPI has increased by $7.5/mt on average over the past week to $380-400/mt FOB, in line with market expectations as the main exporting mill from Russia has been targeting $400/mt FOB since late December. After the holidays, trading activity has improved. Some small tonnages of ex-Russia BPI have been traded to Turkey at $420-425/mt CFR, with a few sources underlining that the price is for “basic pig iron, without extras.” As for low-manganese pig iron, offers have been at high as $430-440/mt FOB.
An offer from Donbass, the Ukrainian territory illegally occupied by Russia, has been heard at $410/mt CFR, translating to $385/mt FOB or so.
Also, negotiations for Russian BPI have been resumed in Europe with a deal rumored at $430/mt FOB, translating to $395-400/mt FOB Black Sea. However, no details have been disclosed so far. The previous sales were down in early December at $395/mt CFR.
At least one sales source said that the Far East market has been a bit more attractive than in late December, though no new deals have been reported so far. One cargo sold from Russia to China at $420/mt CFR around a month ago has been redirected to Southeast Asia, according to market sources. “I still do not see the tradable price higher than $420-430/mt CFR in Taiwan,” a trader said. Freight from the Black Sea to Asia has been assessed at not below $50/mt.
