Following their long-lasting resistance, Chinese customers appear likely to have finally accepted higher prices for basic pig iron (BPI).
Accordingly, by the end of the current week SteelOrbis has learned of a deal for ex-Russia BPI at $555/mt CFR to China, for October shipment, around $15-20/mt higher than the latest booking for ex-Ukraine BPI. However, taking into account the $70-75/mt freight and the trader’s margin, the FOB price in the abovementioned deal is assessed at $475-480/mt FOB Black Sea, which is in line with price fixed in the previous deal for ex-Ukraine BPI. Another Russia-based producer has reportedly sold at $565/mt CFR to China, but this information has not been confirmed by the time of publication. “A lot of suppliers seem to have offloaded their availabilities to China and US, so it makes sense to increase the prices for new parcels, on the back of seemingly stable scrap and high freight costs,” a CIS-based supplier commented with regard to the current developments in the global BPI market. “This rebound in demand from China could still be temporary, but at least the market has started to move,” an international trader told. “The sellers are aiming to push the prices up, but I hardly believe the contract has been already signed. It looks like that CIS-based suppliers are searching to wake up the US steelmakers,” an international trader commented. “Apparently BPI price is increasing in China, mostly on the back of capacity restrictions curbing the BF production. Even though using molten iron is cheaper than pig iron, the Chinese steelmakers have no other choice rather than to accept the price,” a China-based source stated.
As SteelOrbis reported earlier, Brazil-based BPI suppliers have increased their export offers to $500/mt FOB, up $20/mt compared to the latest deal prices fixed in early September. This level translates to at least $555/mt CFR China, taking into account the freight rate.