Despite moderate activity in the global basic pig iron (BPI) market during the past week, global suppliers have been determined to increase their offers, based mainly on support from limited allocation and higher scrap prices. Meanwhile, Brazil-based suppliers cite costlier raw materials amid the monsoon season as an additional reason for the higher prices.
Accordingly, ex-Brazil BPI is currently available at $395/mt FOB, which is considered by most market insiders as not workable as of today. “The last sale at $375/mt was already high. Hence, $395/mt is a game number. Not real,” an international trader stated. “HMS in the Chinese domestic market has jumped $10-15/mt and that could be the only legitimate reason why the latest BPI transactions were at a $10-15/mt premium as well to $375/mt FOB, instead of $360/mt done two weeks ago. The price at $395/mt FOB sounds like a joke,” another international trader told.
Russia-based BPI supplier Tula is said to be targeting $390/mt FOB, raising its offers by almost $20/mt compared to the recent sales done a week ago. Meanwhile, most other CIS-based suppliers prefer to closely watch the market developments, doing sporadic business only with traditional customers. Accordingly, SteelOrbis has been informed of two ex-Ukraine BPI sales to one Turkish steel mill. While last week the material was booked at $380/mt CFR, this week the buyer was already forced to accept $390/mt CFR. Some market insiders state that both deals were done at $1/mt lower than the mentioned numbers. In addition, a modest cargo of ex-Ukraine BPI was booked to Europe at $395/mt CFR. “Turkey and Italy must come to $400/mt CFR. Otherwise, no cargoes for them. But as of today these numbers have still not been reached. For steel mills it is much too high, especially in Italy”, a trader commented.
Sentiments in the US market are gradually improving, with the ongoing increase of steel capacity utilization rates. “Things are firming up. I would say that the workable price in the US today is $390-395/mt CFR NOLA,” a US-based source stated.
Taking into account the current situation, SteelOrbis’ assessment for ex-CIS BPI prices is $370-380/mt FOB, versus $365-370/mt last week.