Global BPI market still positive amid rising scrap prices, lower supply pressure 

Friday, 08 December 2023 17:44:40 (GMT+3)   |   Istanbul
       

Prices of basic pig iron (BPI) in the global market have been bolstered by the recent hike in the scrap segment and the rise has been accepted by buyers in the major destinations like Turkey and Asia. However, in general, BPI prices are still lagging behind the scrap price increases. 

In the benchmark US import BPI market, prices are still slowly moving up. The latest deal for ex-Brazil BPI with 0.15 percent of phosphorus content was signed at $430/mt FOB, excluding financing, while last week the sales level was at $428-430/mt FOB and including $4/mt financing in some cases. Moreover, this week, negotiations have been held at $435/mt FOB, though no information about new deals has been reported so far. “Brazilian mills are aiming for $440/mt FOB now. However, I think this recent uptick is mainly driven by imminent restocking needs, after the UAW came to an agreement with the big three automotive companies… Some buyers and service centers who had to replenish their stocks are apparently indicating some artificial market activity, which may lose momentum pretty soon, unless we will see a sustainable recovery of downstream and end-consumer demand,” a trader said about the situation in the BPI market in the US. The recent sale from Brazil has translated to $465/mt CFR New Orleans at the highest, according to market sources. 

Offers for BPI with lower phosphorus content from Brazil have been reported at $445-450/mt FOB. 

There have been reports of a tonnage of ex-Ukraine BPI with phosphorus content lower than 0.15 percent traded at $475-477/mt CFR, SteelOrbis has learned. 

As for the Black Sea market, the SteelOrbis reference price has settled at $370-390/mt FOB, up by $10/mt over the past week. The price includes the latest deals and tradable levels for basic pig iron from Russia. 

Over the past two weeks, around 50,000 mt of ex-Russia BPI have been traded to Turkey, with the last deal signed at $405/mt CFR, translating to $375-380/mt FOB Black Sea. In total, the producer sold about 120,000 mt of pig iron to Turkey, but for a fairly long period of at least three weeks. Given that ex-US scrap prices in Turkey have reached $428/mt CFR this week, the latest deal price level has already been assessed as being low. “Now, sellers' expectations from Russia are at $400-410/mt FOB [for basic pig iron],” a Turkish trader said. 

Low-manganese pig iron offers from two sellers have been reported at $410-420/mt FOB. 

One Russian mill succeeded in selling 40,000 mt of basic pig iron to China at $420/mt CFR late last week. This price translates to around $370/mt on FOB Black Sea basis. “This level is already low for sellers. If you have the material, you will target $390/mt FOB at the lowest,” a market source said. 

No new deals have been reported for ex-Russia BPI to Europe after sales at $390-395/mt CFR at least two weeks back. “At least two big vessels were sold and the seller [the main seller to the Italian market] is under less pressure from stocks now,” a trader said. Also, a few market sources have said that two major buyers in Europe have been more active in checking Brazilian BPI prices as there is still talk that Russian pig iron may be included in the EU’s 12th package of sanctions. 


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