A fresh deal for ex-CIS basic pig iron (BPI) to the US, which has been disclosed to the market by the end of the current week, has left the majority of market insiders in a state of confusion. Though global BPI prices have been poised to increase further amid the ongoing firm uptrend in the scrap market, increased costs of BPI production and, above all, due to the shortage of supply, it was hardly expected that prices would skyrocket so quickly and so sharply.
Accordingly, one Russian BPI producer sold a cargo to a US steelmaker at $452/mt CFR Port of New Orleans, managing to increase its price by $22/mt compared to the previous deal done at the end of previous week. Officially, the supplier sold the material for shipment in March: however, there have been discussions in the market that the shipment may have been for January. “Even taking into account the craziness of the global market these days, this movement is extremely serious,” an international trader commented. “It seems we play a game of who jumps higher. However, all have forgotten the rules of the game. I am sure they will be recalled once China leaves the BPI market, resuming imports of scrap from January 2021. Then BPI suppliers will be not so brash, I believe,” another international trader stated. Meanwhile, the other CIS-based mills have withdrawn their offers, preferring to watch the development of the situation after the abovementioned deal. “US steelmakers are a hostage to the situation. They wish to buy, but there is nothing in the market,” one of their representatives commented.
Taking into account the current developments, SteelOrbis’ assessment for ex-CIS BPI prices has soared to $430-434/mt FOB Black Sea this week.
In the meantime, one Brazil-based supplier has sold a mixed cargo of basic and nodular pig iron to the US at $405/mt FOB south coast, while last week the indicative offers for BPI were voiced at $405-410/mt FOB.