The uncertainties regarding the future price trend, coupled with sluggish demand from key customers, have continued to weigh on sentiments in the global basic pig iron (BPI) market. By the end of the current week, with frequent discussions about the possibility of distressed cargoes from China appearing in the market, the situation has become even more complicated. “There are too many distressed cargoes being offered around. With about 300,000 mt of pig iron being in question, it could cause serious problems,” a key Hong-Kong-based trader stated. “As of now, China is just checking the opportunities to re-export cargoes. They are not distressed yet, to my knowledge. Moreover, the volumes are less. As far as I know, there are about two to three cargoes,” another trader based in Europe stated. “Chinese buyers are trying to move the cargoes. But it is very difficult to absorb China’s volumes anywhere else. Hence, I believe, the majority of the quantity will actually move to China,” a major Brazil-based BPI seller stated.
Meanwhile, no fresh transactions for ex-CIS or ex-Brazil BPI have been heard in the market, with most suppliers being to a large extent sold out until the end of the current year. According to estimations, ex-CIS BPI for distribution is possible to get at $540/mt FOB, though “not so many cargoes are available”. “Deals to big consumers like steel mills are missing currently. With China and Asia being too quiet, I am not positive towards the developments for the first quarter, to be honest. There is a big chance everything will drop soon,” a key trader dealing with pig iron stated.
Rare ex-India BPI offers have been heard at $510-515/mt FOB, with most Indian BPI suppliers not being in a hurry to sell abroad, enjoying solid demand locally.
Recent ex-CIS and ex-Brazil BPI prices have been at $530-545/mt FOB Black Sea and at $500/mt FOB, respectively, based on the latest transactions. With the bearish mood in the global steel market deepening further and with a downward correction already seen in scrap deal prices in Turkey, BPI prices are currently under great pressure.