Though prices for basic pig iron (BPI) in the European Union have posted a significant increase over the past month, especially after the hike last week, buyers have been refusing to accept the higher prices. They claim they purchased sufficient volumes earlier and that the recent price increase is mainly nominal, based on the freight rate surge and some expectations, while the fundamentals still weak.
The latest offers for import BPI have been reported at $480-500/mt CFR to major European buyers, where the lower end of the range corresponds mainly to ex-Ukraine material, while $495-500/mt CFR levels are for ex-Brazil prices. Last week offers from different origins, including some cheaper Asian sources, were at $465-485/mt CFR. But the highest tradable level is still not above $470/mt CFR, stable week on week, as higher offers “are simply not workable here, so we are not interested even if they are above $500/mt CFR tomorrow,” a European source said.
Partially, the rise in offers has also been based on the latest deal prices from Brazil, at higher FOB prices signed to the US ($450-455/mt FOB) and rises in freight rates. For a large vessel, the freight from Brazil to Italy is estimated by market sources at up to $47-50/mt at the lowest, up by $10-13/mt from pre-war rates.
In the HBI segment, ex-Libya material has been quoted at $370/mt CFR to Italy from traders. But offer volumes have been rather small after the previous bookings and due to the absence of a new tender from LISCO. “We are not receiving any offers at the moment. We got enough [booking earlier],” a buying source said.
In Turkey, prompt shipment Libyan HBI in small volumes has been available at $366-368/mt CFR. As for sanctioned HBI, only one ex-Venezuela HBI cargo has been heard on the water, with offers at $340/mt CFR or slightly below.