Lately, the activity in the global basic pig iron (BPI) market has picked up substantially. Nevertheless, a few rumored deals which surfaced and were actively discussed in the market this week turned out to be just rumors. “There are crazy numbers all over the world. The market is so messed up,” an international trader stated commenting on the current market situation.
Accordingly, following an ex-Brazil BPI sale to the US at the beginning of the current week at $550/mt CFR, SteelOrbis has learned of a few bookings of ex-Ukraine BPI done to the US at $535/mt CFR. With the information leaked to the market, the justification of the price in the ex-Brazil BPI booking among market players decreased further. “It does not make any sense at all to book material at such a high price. Moreover, the price for ex-Ukraine BPI I consider to be above the market value as well,” an international trader stated. “I am afraid it was a plan to pour this price [for ex-Brazil BPI] into the market in order to cause some panic. However, all market insiders know where the real tradable levels are,” a market source said. Some market players admit that the deal was apparently done to an international trader, with further shipment to a Turkish steelmaker, not to a US distributor. Most players are convinced that there is no apparent shortage of material in the global pig iron market which could cause such a sharp increase in deal prices for ex-Brazil BPI. As SteelOrbis reported, late last week a major US steelmaker booked a 50,000 mt cargo of ex-Brazil BPI for September shipment at $450/mt FOB, which translates to around $490/mt CFR Port of New Orleans, given the current freight rate at $40/mt.
In Italy, information about a deal for ex-Russia BPI at $450/mt CFR Marghera, which has likewise leaked into the market this week, has not been confirmed. “I suppose such price levels could be achieved for the material from the Ukrainian territories temporarily occupied by Russia, but not for ex-Russia BPI,” a major international trader stated. Specifically, offers for BPI produced by Russia’s Ural Steel have been heard at $485-490/mt CFR Marghera. In the meantime, negotiations for ex-Ukraine BPI have been heard at around $550/mt CFR Marghera this week.
Furthermore, information about a sale of BPI produced by Russian mill MMK to China has been discussed in the market this week. Allegedly, a BPI cargo for 50,000 mt, with August shipment, was booked at $400/mt CFR, though again the information has not been confirmed by the time of publication, with some sources admitting that the deal was apparently done for slab. “Although the deal has not been verified yet, given the unfavorable position of Russian companies due to Western sanctions and their “desperation for cash” everything could happen,” an international trader stated. One way or another, the price in the deal in question is low even if it was done for slab. As SteelOrbis reported earlier, deals for ex-Russia slabs in China were at $505-525/mt CFR in late June-early July and then one sale was rumoured at $540-545/mt CFR China. Afterwards, Russia left the Chinese market, citing unacceptable levels.