Although the concerns regarding soaring freight rates have been accumulating among global basic pig iron (BPI) market players, BPI suppliers have continued to conclude bookings very actively, seeking to take every advantage of the upbeat outlook in the global commodity market. Aiming to offset alleged increases in transportation costs, the sellers have continued to push their prices up. Moreover, higher freight rates, combined with rising offers on FOB basis, have pushed up CFR prices. “Freights which have doubled lately are killing all chances for business. The trade is likely to become regional in such a terrible situation,” an international trader commented with regard to the current situation in the global freight market. Whatever has been happening, this week Brazil-based and CIS-based BPI suppliers have booked material at much higher prices compared to the levels which were achieved a week ago and were already considered to be “skyrocketing” by market insiders.
Accordingly, SteelOrbis has learned of two cargoes of 30,000-35,000 mt ex-Brazil BPI with 0.15 percent phosphorus booked to a major US steelmaker at $520/mt FOB southern ports, for May shipment. Last week, a cargo of 60,000 mt was sold by another Brazil-based supplier at $515/mt FOB southern ports to a trader. There is information in the market that a part of the cargo is destined for Argentina. Taking into account the estimated freight at $30/mt, the CFR price is being assessed at $550/mt CFR Port of New Orleans. However, as it mentioned above, the assessments on freight costs continue to diverge. Meanwhile, a Russia-based mill managed to sell 50,000-55,000 mt of BPI to another big US steelmaker at $570/mt CFR, for May shipment. The material will be shipped from Baltic Sea ports, with freight being estimated at $27-30/mt. “The freight in March has indeed increased to $36-37/mt, however for April-May it is still possible to find $30/mt and slightly lower,” a CIS-based supplier commented. The most recent deal to the US prior to the abovementioned bookings was done last week at $550/mt CFR Port of New Orleans for ex-Russia BPI. Along with that, according to market insiders, there has been one more inquiry in the US for 20,000 mt of BPI. “It is a bit scary that the US has accepted such high prices for BPI so rapidly, though their HRC is at $1,300/mt. I think we might see rapid steel price increases in China very soon,” an international trader stated.
In the meantime, Ukraine-based producers have continued to be focused on sales of small lots to distributors. Accordingly, one supplier has managed to sell 5,000 mt of BPI to Turkey at $565/mt CFR, while another producer sold the same volume at $573/mt CFR, also to Turkey. Both batches are for April shipment. Last week, most offers were voiced at $560/mt CFR, as SteelOrbis reported previously.