Solid demand from China, a limited allocation of material, and, concurrently, the strong increase in iron ore and scrap prices in the global market continue to support CIS-based suppliers of basic pig iron (BPI). However, sellers have become more cautious in negotiations with Chinese customers and are not willing to sell below targeted prices.
Active offers to China from one CIS-based mill at $360/mt CFR during the last two weeks did not yield any results. Subsequently, the producer has decided to withdraw offers to this destination, aiming to gain a clearer picture of the market and enter the market later with higher offers. As SteelOrbis reported earlier, BPI deal prices in China exceeded $365/mt CFR following the most recent booking of ex-Brazil material.
Following relatively long negotiations with Turkish customers at mostly $330-335/mt CFR, one CIS-based supplier has managed to sell a 30,000 mt cargo at $335/mt CFR, for October shipment. Some market insiders report that the price was $1/mt lower than the abovementioned level.
SteelOrbis has been informed of two small cargoes of ex-CIS BPI to Italy at $342/mt CFR and $347/mt CFR, respectively, for September shipment. The overall trading activity in Europe remains muted, according to sources.
Demand for BPI imports in the US market remains weak due to the ongoing low utilization rates of steel mills and, in particular, amid the weakening of hot rolled coil (HRC) and scrap prices. “China keeps pig iron prices high. Based on what China is paying, pig iron to the US should be around $345/mt CIF, but there have been no recent deals,” a US-based market insider stated.
As a result, SteelOrbis’ assessment for ex-CIS BPI prices for October shipment has remained unchanged compared to the previous week at $315-330/mt FOB Black Sea.