CIS-based basic pig iron (BPI) suppliers have again attempted to increase prices, supported by demand in China. Nevertheless, market insiders are cautious in their expectations for the future. While some of them are quite skeptical that the new targeted prices can be achieved given that only China has been actively buying, others tend to believe that the market will firm up further due to a limited allocation of material with short lead times.
Accordingly, by the end of this week, ex-CIS BPI offers have widened to the range $315-325/mt FOB, versus $315-320/mt FOB last week. This week, SteelOrbis has been informed of AM KR's 45,000 mt BPI sale to China at $346/mt CFR, with the FOB level estimated at $315/mt FOB Black Sea. The material is for August shipment. A cargo of 20,000 mt ex-Russia BPI has been sold from a Far Eastern port at $349/mt CFR, with the freight rate assessed at $10-12/mt. The deal was concluded for September shipment.
According to sources, by the end of the current week, most Russian suppliers have been reluctant to sell lower than $325/mt FOB. “I believe that they made a mistake by declining my bids at $315-320/mt FOB. Now the market is softer, in particular, because of ex-India BPI bookings in China”, one trader stated. As SteelOrbis has been informed, a cargo of about 25,000-30,000 mt Indian JSW's BPI for August shipment was booked at $338/mt CFR, while a deal for another lot of ex-India material was signed at $335/mt CFR. Another trader, also cautious as regards a further uptrend, added, “I rather think China's appetite is slowing and this might cool down the market a little bit. On top of that, US buyers have not returned to the market yet and the US economy is still struggling”.
At the same time, there is another view of the future market development - “Demand is firm in China. Hence, $350/mt CFR is on the horizon”, one trader said.