Having purchased heavily during the past two weeks, China remains active for pig iron imports but seeks lower prices. Suppliers in the meantime are maintaining a cautious approach due to limited allocation.
Pig iron bids from China have been falling day by day. While early this week they were ready to buy at $300-315/mt CFR, currently most price ideas are at $290-295/mt CFR, SteelOrbis has learned. Such levels are considered not acceptable by sellers for now. “Evaluating the current market environment, I do not exclude that prices will go down further. But we are not in a hurry to sell lower than our latest deals done at $300/mt FOB,” one of key suppliers in Brazil said. Brazilian mills are sold out until June, market insiders report. Some suppliers are reluctant to do any new business, citing extremely long positions and concerns about potential cancellations. “If prices drop further, Chinese will not perform all these contracts or will try to renegotiate,” one European trader stated regarding the current business environment. The most recent deal for about 50,000 mt of ex-Russia pig iron to China was concluded at around $320/mt CFR, SteelOrbis has learned, down $5-10/mt from deals last week.
There have been active discussions in the market regarding the increased activity of Indian pig iron exporters. However, traders consider ex-India offers voiced at $300-305/mt FOB as not workable today. Last week, Chinese buyers, according to sources, booked ex-India pig iron at $330/mt CFR and slightly below.
The demand in the US market remains close to zero with steel mills’ shutdowns resulting in a negative outlook. “I am trying to postpone both payments and shipments as long as possible… customers just cancel all business done,” one Brazilian pig iron supplier stated. Meanwhile, ex-Ukraine pig iron offers were voiced to the US at $320-325/mt CFR early this week.
As a result, ex-Brazil BPI indicative export offers have remained at $300/mt FOB, while ex-CIS prices have settled at $295-300/mt FOB for now, slightly below the level last week.