The weekly Davis Index for basic pig iron (BPI) decreased by $30/mt on Thursday from $353/mt cfr New Orleans to $323/mt cfr Nola, following lower-priced CIS-origin sales to China and no US activity. Market sentiment was negative this week after steel mills, automakers, and other industry members restricted activity. 

 

Two CIS-origin producers sold cargoes of material this week for around $295-300/mt fob China, which is about $30/mt below their most previous sales of $330/mt fob Black Sea. 

 

The last BPI sale to the US occurred in mid-March, when CIS-origin cargo sold for around $350-355/mt cfr Nola. In early March, BPI offers from the CIS and Brazil rose to $365-375/mt cfr Nola, following a CIS-origin BPI cargo selling to the US at $363/mt cfr Nola on March 5.  

 

Producers have since reduced proposals to $325/mt cfr Nola, offering BPI cargoes at that level on Thursday that are intended for April or May delivery.

 

The index for nodular pig iron (NPI) imports was flat at $418/mt cfr Nola on Thursday, with no new sales this week. The last offers heard declined to $405-430/mt cfr Nola from $430-440/mt cfr Nola, with no confirmed bids at that level. 

 

The weekly Davis Index for US hot briquetted iron (HBI) imports remained flat at $254/mt cfr New Orleans. No HBI import deals to North America were reported this week, nor were there reports of the material moving to other locations.

 

A reduction in automotive output has resulted in diminished prime scrap generation, which could tighten supply and increase demand for BPI and other scrap alternatives. However, steel mills unexpectedly reduced production, which spurred excess hot metal being pigged and beached, adding to the material’s supply. Due to this offset, it is unlikely that BPI and other scrap alternative materials can sustain much of a premium compared to other grades.

 

Market participants anticipate BPI and scrap alternative prices will decline because of global headwinds and other ferrous scrap grades trending down.

 

Mills have reported reduced buying programs for April trade, which may commence early next week. Integrated mills have the greatest reductions due to their reliance on customers, like those in the automotive industry.

 

According to early forecasts, prices will decline by at least $50/gt on obsolete ferrous scrap grades. Other grades, such as prime and scrap alternatives, are also expected to see similar decreases, which market participants hope won’t be too steep based on availability of those materials.

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