During the past weeks, CIS-based basic pig iron (BPI) producers have been focused on sales of small lots to distributors, generally seeking to increase their prices further, to the US market in particular. Following a few bookings done to Europe and Turkey last week, one CIS-based producer increased its offers up to $580/mt FOB Black Sea, which is considered by all market participants as absolutely unworkable for now.
Accordingly, SteelOrbis has learned of two ex-Ukraine BPI sales of around 5,000 mt each to Italy at $535/mt CFR Marghera, for April shipment, with the FOB price being estimated at $505/mt FOB Black Sea, taking into account the freight assessed at $30/mt. Another cargo for the same volume was booked to Spain at $545/mt CFR with the same FOB price but a higher freight rate. A lot of ex-Russia BPI of 5,000 mt was traded to Turkey at $520/mt FOB Black Sea, while another Russia-based producer sold a batch of semi-nodular pig iron at $545/mt FOB, both for April shipment. Freight is said to be about $20/mt, following the recent rise in rates.
SteelOrbis has learned that one supplier has increased its offers to $580/mt FOB on the heels of the above-mentioned deals, noting that the mill is almost sold out for April. “It is a common phenomenon: when the suppliers do not find support from their big customers, they are seeking it among distributors, who always purchase material with premiums because of small lots. However, it is hard to believe that the US or Chinese buyers will accept this level as the price is totally unhealthy in comparison with the scrap price,” a trader stated. Amid the above circumstances, BPI in the US would be priced about $100/mt higher than its closest scrap counterpart, busheling steel scrap, compared to the more common $30/mt spread. “The market is going nuts, with credit lines being stretched. However, the duration of this trend remains under question,” the international trader commented.
There are a few market insiders who are quite optimistic as regards the future prospects for the raw material and steel markets in general. “It seems the recent developments are predicting the dawn of a new commodity super cycle, with vaccinations evolving, and plenty of infrastructure projects and billions of US dollars looming around the corner, waiting to lend further momentum to both demand and prices,” a European trader commented.
Meanwhile, Brazil-based suppliers are said to be ready to sell at $500/mt FOB, however with no takers for now. The most recent booking of ex-Brazil BPI was done to the US at $470/mt FOB in the first half of the current month. Offers of BPI from the positions of traders in China at $500/mt FOB have not attracted any interest either, SteelOrbis has learned.