By early July, buying activity in the global basic pig iron (BPI) market has become visibly muted. The softening of scrap prices puts pressure on BPI prices: however, the suppliers of BPI are resisting any decrease for now, with some of them even keeping increasing prices further.
According to sources, bids from Chinese customers have not exceeded $340/mt CFR this week, while the most recent deals have been done at $346-349/mt CFR for ex-CIS material. In the meantime, one more deal for ex-India BPI was disclosed to the market: a cargo of 30,000 mt was contracted by an international trader at $345/mt CFR north China at the beginning of the previous week, while other bookings for material of the same origin were done at $335-338/mt CFR, as SteelOrbis reported previously. Current offers for Russia-based Tula’s BPI at $355/mt CFR are considered by market insiders as not workable. In the meantime, most ex-CIS producers have been taking their time to gauge the development of the market. “We are waiting for the US return after the July 4 holiday. However, at the same time, we are not likely to place any bets with them, taking into account the downtrend in the scrap market and the still 54 percent steel capacity utilization”, said a CIS-based producer. Demand from Europe-based customers remains subdued, while Ukraine’s Metinvest is said to be offering at $335/mt CFR Italy. As a result, SteelOrbis’ assessment for ex-CIS BPI prices has moved up mostly by $5/mt over the past week to $320-330/mt FOB.
Meanwhile, a few more Brazilian sellers have withdrawn their offers, being mostly sold out until October. The most recent offers for ex-Brazil BPI have been voiced at $320/mt FOB. “BPI production in Brazil has faced higher costs for charcoal. Moreover, they are not in a hurry to sell, having long order books”, commented one international trader.