The global basic pig iron (BPI) market has remained muted this week as customers in all major outlets have been staying away from firm negotiations, expecting prices to go down. At the same time, except for the US import market, where quotations of pig iron have not changed since the last deals done before the Easter holidays, prices have softened in Europe and Turkey due to slack demand and weakening scrap prices.
The major benchmark market - the US - has been closely watching changes in the local scrap segment, which has moved sideways for higher grade scrap like busheling and has declined by around $30/mt for HMS I. No major movements have been seen in the BPI import market in the US as customers purchased big volumes before the Easter holidays. Specifically, two cargoes of ex-Brazil BPI changed hands at $565-575/mt CFR, while in addition, two lots of ex-Ukraine BPI were also traded to the US at slightly above $570/mt CFR a week ago. “They [US customers] purchased a lot just before Easter, so the market will be quiet for a few weeks,” a trader said. Brazilian suppliers have kept offers at $530-535/mt FOB, in line with the latest deals to the US, waiting for US customers to come back, and they not rushing to offer to any other destination, where prices are much lower.
At the same time, the downtrend has been clearly seen in the European and Turkish import pig iron markets, where ex-Russia and ex-Donbass offers prevail. For instance, a major Russian producer is reported to be ready to sell at $470/mt CFR Italy from the previous $480-490/mt CFR offers. An indication for pig iron from another Russian mill, which is not under direct sanctions, has been heard at $485-490/mt CFR in Europe.
In Turkey, the downtrend in the scrap market has impacted BPI quotations a lot. The latest offers for ex-Donbass BPI have been heard at as low as $380/mt FOB, which translates to $400-410/mt CFR, sharply down from the previous level of $410/mt FOB. As for ex-Russia BPI, it is available at $420/mt CFR if there is a firm bid. There were reports that officially a Russian producer offered at $430/mt CFR or so, but can accept lower levels, though “all Turkish customers are not willing to buy as scrap is down and the outlook is not good at all,” a Turkish source said.