Chinese pig iron buying slows, market seeks clearer trend

Tuesday, 07 April 2020 17:26:52 (GMT+3)   |   Istanbul

China’s buying activity in the basic pig iron (BPI) segment has slowed down somewhat recently, following weeks of active bookings in large lots from various sources. In the meantime, global BPI suppliers have become much more cautious in offers for now, seeking to see a clearer trend after the sharp rise in scrap prices in Turkey.

Pig iron importers from China have managed to get the import price they were insisting on earlier. According to sources, at the end of last week a large volume was sold from Ukraine at $290-295/mt CFR China, which is estimated by market insiders at around $275/mt FOB or slightly below. As reported earlier, the previous deal ex-Russia was closed around 10 days ago at $320/mt CFR and later bids from China fell by a total of $25-30/mt in a few separate steps. For now, there seems to be no solid interest from buyers, with rare price ideas voiced at $290/mt CFR. “China is taking a break from buying, and so the market remains under pressure,” one Asia-based trader says.

However, global pig iron suppliers are not in a hurry to sell either as most of them are full for May and partly for June production in terms of sales. Moreover, they are seeking the chance to boost their prices, following the recent sharp rebound in scrap prices in Turkey. Russian sellers are planning to avoid going far below $290/mt FOB for now and are currently trying to evaluate the market. In particular, NLMK has decided to withdraw offers and take a pause for now. The majority of Brazilian suppliers are also adopting a wait-and-see stance, rejecting all bids below $295-300/mt FOB.

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