Lower-priced offers of distressed basic pig iron (BPI) cargoes (mostly from China), which have been discussed more and more actively in the market lately, have continued to depress the outlook for the future price trend in the BPI market. Besides that, the recent sharp decrease in the Turkish scrap market has additionally undermined the market mood. Meanwhile, the main traditional customers have been not in a hurry to accept current offers, waiting for the return of Russia-based BPI suppliers, who following the export duty cancellation in Russia will likely accept lower prices for January shipments, concurrently pushing the market further down.
On balance, this week ex-India BPI with shipment in December has been actively offered at $490/mt FOB, in particular to Italy, which is non-ordinary destination for ex-India BPI origin due to the transportation, among other issues. Taking into account the accessed freight at $40-50/mt, the CFR price is estimated at $530-540/mt CFR Marghera. However, some traders have reported about offers even at $525/mt CFR Marghera, in particular. “Such low-priced offers even despite it is lower quality material in comparison to ex-CIS BPI, have made us cautious in new bookings,” a main European trader commented. “Both the European and the Turkish customers do not want to buy anything. A falling scrap is among key reason,” the major international trader, who has ex-India BPI cargoes in hands, commented with regard to the current situation.
Meanwhile, ex-Ukraine BPI offers have been heard at $550-560/mt CFR Marghera earlier, with no takers.
In the coming negotiations, the US customers are expected to exert the pressure on the global BPI suppliers in order to get lower prices. “Considering the cancellation of export duty by the Russian government, Russia-based BPI suppliers are likely to entice customers with discounts,” a global BPI supplier concerned. However, most ex-CIS BPI suppliers have remained inactive in offerings, evaluating the current market developments. Likewise, the Brazil-based BPI suppliers have opted not to offer anything officially amid production issues.