As expected, having achieved higher prices in recent deals to distributors in Europe and Turkey, CIS-based basic pig iron (BPI) suppliers have not missed their opportunity to increase their offers further, in particular, to the US market as their main traditional destination. Some of the CIS-based producers have already succeeded in booking material at a record high level since the end of 2011 and are likely to keep pushing prices further on the heels of the ongoing rise in scrap prices and the overall bullish sentiments in the global steel market. “Commodity prices continue to surge, but whether that continues for an extended period of time lies entirely in the hands of China,” an international trader commented.
Accordingly, SteelOrbis has learned of an ex-Russia BPI sale of 50,000 mt to a major US steelmaker at $550/mt CFR, for April shipment, with the FOB price being estimated at $520/mt if the supplier finds the intended freight rate at $30/mt. “It becomes harder and harder to find freight rates at relevant levels. I have failed to find any shipping company, being ready to offer a freight rate from Black Sea ports to the port of New Orleans in April lower than $36-37/mt,” the international trader stated. Ex-Ukraine BPI offers to Italy increased to $550-555/mt CFR Marghera compared to the most recent deals at $535/mt CFR Marghera done a week ago. At least 5,000 mt of BPI was booked by a trader at the lower end of the range. Meanwhile, offers of ex-CIS material to Turkey have mostly touched $560/mt CFR, up $20/mt compared to trades last week. There is information in the market regarding an ex-Ukraine BPI sale of 30,000 mt at the end of laslt week, for April shipment, to a trader. The price was not confirmed by the buyer or the seller at the time of publication but is widely believed to have been done at not below $510/mt FOB Black Sea. “Wherever the trader sells, he will benefit from this booking,” another market participant commented with regard to this deal.
In the meantime, while at the end of previous week one Brazil-based supplier sold 35,000 mt of BPI with 0.15 phosphorus content for May shipment at $500/mt FOB, this week another Brazil-based seller has already managed to get $515/mt FOB, having booked the material to a trader, with “an open destination”.
Taking into account the current developments, SteelOrbis’ assessment for ex-CIS BPI prices has surged to $520-535/mt FOB Black Sea this week, versus $490-510/mt FOB Black Sea a week ago. Meanwhile, SteelOrbis’ assessment for ex-Brazil BPI prices is currently at $515-520/mt FOB, up $15/mt over the past week.