The strong divergence of interests between basic pig iron (BPI) producers and their customers has led to the ongoing lull in spot trading in the global market since the end of December. Accordingly, while both CIS-based and Brazil-based suppliers do not have any intention of reducing their offers, customers are striving to push prices down, citing the availability of lower offers from China. As a result, officially most producers have withdrawn their offers, preferring to watch the development of the global raw material and finished steel markets. “We are not in a hurry to sell now, availing of all the advantages of good demand for finished steel. Merchant pig iron volumes for March have not even been confirmed yet,” a representative of a CIS-based mill stated. “Production costs are very high here. Iron ore prices continue to keep costs high. We are not offering now,” a Brazil-based seller stated. “There is no real buying activity, though there is a lot of pig iron available in the market. The Indians want to sell, the Chinese want to re-sell, but there are zero takers,” an international trader commented with regard to the current situation. According to market insiders, it is possible to purchase ex-India pig iron at $510/mt FOB, while ex-CIS pig iron is said to be available at $550-560/mt FOB Black Sea. In rare cases, the producers try their luck voicing much higher indications, aiming to test the market, but failing to attract any interest. “There are no official offers from mills, just tentative indications,” one trader said. Accordingly, Russia-based mill Tula is heard to be voicing $620-630/mt FOB, while offers of pig iron produced by Ukraine-based company Metinvest to Italy are reported to be not below $620/mt CFR.
Amid the above circumstances, the most recent deal for ex-Brazil pig iron was signed in late December at $540/mt FOB, while the latest bookings of small lots of ex-CIS pig iron were done at $550-555/mt FOB Black Sea.