The global basic pig iron (BPI) market has been practically at a standstill as most major buyers have been waiting for discounts amid stable to lower scrap prices, but suppliers from their perspective have not been ready to allow further declines and have been insisting on higher prices.
In the benchmark US import BPI market, offers from Brazilian suppliers for BPI with 0.15 percent phosphorus content are still not below $400/mt FOB, while major US mills have been asking for $380/mt FOB. This has resulted in weak trading activity. In the local scrap market in the US, at least one mill has come out with their October pricing, announcing stable prime scrap prices and lowering shredded and P&S by $20/gt. Though this is better than the expected $10-20/gt decline for all grades, one market source said, “Scrap is still not rising, so no support for pig iron.”
The SteelOrbis reference price for ex-Black Sea BPI has settled at $350-360/mt FOB, with a midpoint at $355/mt FOB, down slightly by $2.5/mt over the past week. At the moment, the tradable levels for ex-Black Sea BPI are very far from the levels desired by mills after Russia’s introduction of the export tax. One major supplier is not willing to go below $400/mt FOB Black Sea. “At the moment, people are waiting for when stocks of BPI will overflow, then prices may be adjusted,” a trader said. At least two other Russian mills have decided to reduce exports at least for some time, with one stating, “In BPI, we will have to adapt to this seven percent tax.” They are focusing on the local market at least for the winter season.
The only deal reported recently was from a non-sanctioned Russian mill to Europe. According to market sources, up to 15,000 mt were traded at around $385/mt CFR, though some said that the price was closer to $395/mt CFR. With freight at around $30/mt to Italy and at around $35-40/mt to Spain, this level translates to $355/mt FOB Black Sea or so. However, this week, bids from European customers have started to given at as low at $360-370/mt CFR Italy, translating to $330-340/mt FOB Black Sea. “$360/mt FOB is workable for foundries, but for steel mills the price is lower,” a source said.
No new deals have been heard to Turkey so far. Some market sources said that the tradable level is assessed at $370-390/mt CFR depending on the buyer, which again is $345-360/mt FOB at the highest.