The weekly Davis Index for basic pig iron (BPI) increased by $5/mt from $322/mt cfr New Orleans to $327/mt cfr Nola on Thursday as offer prices escalated amid material tightness and raised sales prices into China.
The US paid about $320/mt cfr Nola, for its most recent BPI purchase for CIS-origin material around June 11. The BPI market has been tight since mid-June and new offers for material are at $330/mt cfr Nola, at minimum. Some producers are offering material as high as $355/mt cfr Nola based on Chinese buyers’ willingness to pay an equivalent fob price.
The index for nodular pig iron (NPI) imports held at $375/mt cfr Nola as new offers for the material has not been heard for several weeks and further offers or sales have not been confirmed. The weekly Davis Index for US hot briquetted iron (HBI) imports remained at $233/mt cfr Nola amid low demand and import activity for the grade.
The domestic sentiment is negative as the market approaches the ferrous scrap trade week, likely beginning July 7. Prime scrap is expected to decline by $10-30/gt, based on region, compared to June levels as scrap supply has been rising without a comparable increase in demand.
Scrap is overhanging in the US market and buyers have been less interested in alternative scrap grades such as BPI. While domestic prices are declining, the global price for BPI has remained stronger and consequently, when US purchases resume for that grade, buyers will likely be compelled to match current sale levels.