Despite the ongoing absence of interest from big buyers in the US and China, CIS-based basic pig iron (BPI) producers have been maintaining their bullish stance in offers, with a few of them having successfully achieved higher prices in their fresh sales to distributors this week. Apart from this, global BPI sellers have attempted to take advantage of the recent announcement of changes in China’s tax policy, in particular, the removal of the existing one percent import duty for pig iron. “The recent adjustments in China will help to expand the import of steel raw materials into China to a certain extent and, concurrently, support prices worldwide,” a key global BPI supplier said. There are market insiders with quite different views though. “In this regard, China is far-fetched. It is still far behind on BPI. Hence, we do not expect any effect from the import duty removal on the global BPI market,” one international trader commented.
Nevertheless, this week CIS-based BPI suppliers have managed to push their prices up significantly, selling small lots to distributors in Europe and Turkey. Accordingly, SteelOrbis has learned of a small ex-Ukraine BPI lot (up to 6,000 mt) sold to Italy at $592/mt CFR Marghera, down $1/mt compared to the official offers voiced by a Ukraine-based supplier during the week. The material is destined to be shipped in early June. Another lot of 20,000 mt of ex-Ukraine BPI of higher quality was booked by another distributor at $620/mt CFR, with the intention to ship it to two different customers in northern Europe. The freight is difficult to estimate correctly as the supplier ships combined cargoes of raw materials and finished steel. However, a few customers believe that, following this deal, the supplier is unlikely to sell below $600/mt FOB Black Sea anymore.
Meanwhile, a Russia-based supplier sold a 5,000 mt lot to western Europe at $595/mt FOB Baltic Sea, for June shipment, with the freight rate estimated at $22-24/mt. The same supplier booked another 10,000 mt cargo to a distributor in Turkey at $590/mt FOB Black Sea, also for June shipment. Taking into account the estimated freight at $18/mt, the CFR price is assessed at 608$/mt CFR. Last week, the supplier booked a 5,000 mt lot of BPI to Turkey at $575/mt FOB Black Sea.
On balance, taking into consideration the abovementioned developments, SteelOrbis’ assessment for ex-CIS BPI prices has increased to $567-590/mt FOB Black Sea, versus $550-560/mt FOB Black Sea a week ago.
Meanwhile, Brazil-based suppliers have been targeting $605/mt CFR Port of New Orleans, with no interest from buyers yet. “Prices are just increasing. Brazil has firmed up, trying to get $570/mt FOB, in some cases even testing the market with offers at $590/mt, but buyers are resisting,” a market source stated. “The market sentiment remains extremely bullish among all mills worldwide,” another trader commented.