Following the latest sizable bookings, global first-tier suppliers of basic pig iron (BPI) appear to have taken a breather in order to evaluate their allocations and, concurrently, to estimate their future prospects on the back of developments in the steel scrap markets. “The advantage of the Brazilians is currently that they are sold out more or less until the end of March. The ports are also occupied, I heard, until the end of April. Hence, they will likely to try increasing their prices,” a European trader stated. “Although many producers in Brazil stopped their production because of the rainy season and they are using the time to reline their furnaces, the market is definitely lacking a downstream demand recovery, so I am afraid their idea price at $500/mt FOB for BPI is far overpriced,” another European trader commented. As SteelOrbis reported earlier, following the latest transaction at $475/mt FOB, a Brazilian supplier sought to get $500/mt FOB. According to SteelOrbis, the deal in question was done to Mexico, but not to the US, as had initially been claimed. The Ukrainian mill is said to have tested the US market with offers at $530-540/mt CFR Port of New Orleans, though it failed to attract any attention due to its “inflated pricing”. “The US market is still not above $500/mt CFR,” an international trader stated.
Meanwhile, this week information about an ex-Russia BPI sale to India has been actively discussed in the market. Reportedly, a 45,000 mt cargo of BPI produced by Russian company Evraz was sold to the Indian market at $435/mt CFR. Despite the price being in line with bids voiced by Indian customers, a few reliable sources doubt the deal took place. “I've heard this deal for AMZ (Alchevsk Metallurgical Complex), with loading from the Black Sea,” a major international trader stated. “If Evraz sold at this price to India, they would have wasted a lot of money. The arbitrage into India is higher these days,” another trader said, echoed the doubts. “This price could be quite attractive for the Indian customers because of the high vanadium content. However, whether this price was workable for the producer remains under question for me,” a trader stated.
In the meantime, ex-Donbas BPI offers have been heard this week at $430/mt FOB Black Sea, up around $30-40/mt compared to the previous levels. Late last week, a small lot (3,000-5,000 mt) of premium ex-Russia BPI was sold to Turkey at $470/mt CFR. However, for basic pig iron, indication prices have been hardly heard above $440-445/mt CFR, and bids may decline even further following the softening of scrap quotations.