With the developments seen in the global steel and raw material markets in recent days, the outlook for basic pig iron (BPI) has severely deteriorated. The pessimism in the market is chiefly China-led after a recent freefall in iron ore prices there in view of possible new lockdowns and, in particular, on the back of stronger production curbs in the second half of the current year. In addition, the absence of buying interest from US and European customers has continued to exert pressure on BPI suppliers’ positions. Higher supply of basic pig iron from Russia, so far only rumoured, has also aggravated concerns in the market. Specifically, Russia-based BPI producers have stepped up their efforts to exclude pig iron from the export products subject to duty.
Consequently, the BPI trade in the global market remains frozen, with offers and bids being voiced individually and in most cases “just to find where the market is, not for real business.” SteelOrbis has learned of a 30,000 mt ex-India BPI booking, done in the first half of August to Southeast Asia at $580/mt CFR, for shipment at the end of August-beginning of September, but this price is said to be not workable any longer. For instance, ex-Russia BPI offers in China voiced at the end of the previous week at $550-560/mt CFR have failed to meet any interest from buyers. Within the current week, some global suppliers are said to have been ready to trade at $540/mt CFR China, but again without any takers. According to market sources, the workable price level in China is hardly higher than $510/mt CFR.
Taking into account the abovementioned developments, the SteelOrbis assessment for ex-CIS BPI has dropped to $500-510/mt FOB Black Sea, compared to $550-560/mt FOB Black Sea valid previously.
Meanwhile, the assessment for ex-Brazil BPI is standing at $500-520/mt FOB.