Prices for basic pig iron (BPI) have remained under pressure this week. Though activity has dropped to minimal levels as most sellers have been reluctant to provide big discounts, expectations are that a drop by $10-20/mt in new deals is possible in the coming weeks.
In the benchmark US import BPI market, activity has been minimal this week, but bids from the major mills have moved down further. According to sources, US steel mills have been bidding at $440-450/mt CFR this week for BPI with 0.15 percent phosphorus content. But the main sellers of BPI with high manganese content from Brazil have been not active this week, partly because of the carnival and partly as they have been strongly resisting cuts in prices from the offers reported at $440/mt FOB last week. There have still been some position offers of BPI with high manganese content from Ukraine and Brazil, which have already been shipped to the US and are offered from ports. But, again, offers are at $460-470/mt CFR at the lowest. There are “still no deals to the US, so a decrease in the new round [of purchases] is inevitable,” a trader said. The reference price for import BPI (with both high and low manganese content) in the US has been corrected down slightly by $5/mt over the past week to $460-480/mt CFR amid weaker sentiments, but still with an absence of deals.
In the Black Sea BPI market, the mood has also become more bearish, following the recent decrease in scrap prices in Turkey. Though large Russian mills are still voicing offers for high-manganese BPI at not below $420/mt FOB Black Sea, market sources doubt that they will able to repeat sales at such a level in the near future. “The market is under pressure. I think all metallics will decline by $20-30/mt. Long steel prices have already fallen by €30/mt compared to 10 days ago,” a European trader said.
In the main import destination for Russian BPI, namely, Europe, prices have remained in a wide range of $425-450/mt CFR, with the lower end reflecting the level sought by steel mills for large volumes. But in the next deals to Italy it will be hard to achieve above $420-440/mt CFR, according to some sources. “The market is softening because we are in trouble with sales [of finished products] and there is no price increase… They [Russian sellers] are not cutting prices officially, but are calling for bids, it means they are ready to discuss,” a European importer said.
In Turkey, a small volume of Russian BPI in a position has been on offer at $440/mt CFR, similar to last week, but “no one dares to take it. Everyone is waiting for a drop,” a trader, selling in Turkey said. “I think we are done with the previous trend, and prices will creep down. Traders may start to go short from now on,” he added.
The SteelOrbis reference price for ex-Black Sea BPI has been corrected to $395-415/mt FOB, versus $395-423/mt FOB last week.