Although some players in the global steel market have lately become cautiously positive towards future market developments, sentiments in the basic pig iron (BPI) segment have remained mostly bearish this week due to the ongoing mismatch between demand and supply. Accordingly, with abundant volumes for prompt shipment in hands, global BPI suppliers, especially those based in Russia, have been willing to be very accommodating to customers, but the latter appear to have temporarily left the market, having replenished their stocks to a large extent previously.
In particular, this week Brazilian BPI suppliers have decided to decrease their offers by around $40/mt to $460-470/mt FOB, but failed to entice any buyers. “I am fairly sure the next bids from the US buyers will arrive at $450/mt Port of New Orleans”, an international trader stated. Given the current freight rate from Brazil to the US at around $30-35/mt, the FOB price might be around $415-420/mt FOB in order to attract interest. “Some people in the US market have been highly aggressive recently, voicing counterbids at $420/mt CFR Port of New Orleans. Although such a sharp decline is doubtful, prices will certainly fall in the coming deals,” another international trader commented.
Meanwhile, this week SteelOrbis has heard of sporadic deals done for ex-Ukraine BPI to Spain at $570-600/mt CFR Bilbao. “It is hard to say that this is a workable level now. Such levels would hardly be accepted when doing business with another global BPI supplier. We should take into consideration all the challenges Ukrainian BPI producers are facing when executing contracts signed previously,” a market source said, assuming the current workable levels to be at much lower levels, though not mentioning any exact numbers. “It is useless to search for workable prices while all the major customers have left for the summer holidays,” the source added.