Although spot trading activity in China has waned significantly in recent weeks, global basic pig iron (BPI) suppliers have continued to push up their offer prices. Moreover, in the most recent bookings to the US, global BPI prices have indicated particularly noticeable increases.
Accordingly, at the end of last week SteelOrbis learned of two bookings of ex-Brazil BPI to the US at $480/mt FOB, one of which was signed for 35,000 mt of BPI with 0.15 phosphorus content for February shipment, while the other was done for 30,000 mt of BPI with 0.12 phosphorus content for March shipment. The CFR prices are estimated to be about $495-500/mt CFR with the higher end of range for shipping to the US from the south of Brazil. Prior to the abovementioned deals, an ex-Brazil BPI cargo changed hands at $450/mt FOB at the beginning of last week, also to the US. In addition, SteelOrbis has learned of a recent sale of an ex-CIS BPI cargo to the US at $472-473/mt CFR, which had failed to find a buyer in China, where it was initially destined, and was shifted from China to the US. Some market insiders have concerns that China has already left the global BPI market, following the coming changes in its import scrap regulation, combined with relatively weakened demand for finished steel, while others believe that the only reason Chinese customers are out of the market is the mismatch between offers and bids. “We still see solid demand, receiving plenty of inquiries from China, but all bids are hardly higher than $430/mt CFR,” an international trader commented. “The situation in China is very complex and quite rational at the same time. What most market participants do not consider is that the only reason why China bought was not because of lack of material but because commercially it made sense. Today, you can still buy domestically in China, at an equivalent of approximately $420-430/mt CFR,” another international trader stated.
Meanwhile, CIS-based suppliers are reluctant to put the uptrend of prices on any hold, after one of them safely fixed $500/mt FOB Black Sea in a new fresh deal. Accordingly, a 10,000 mt cargo of ex-CIS BPI was sold to a trader, for December shipment. “Although we are not in a hurry to sell, we are already unlikely to sell below $510/mt FOB Black Sea,” the representative of another CIS-based mill commented. “The market is on fire. Most mills are cautious about offering,” an international trader said. As a result, SteelOrbis’ assessment for ex-CIS BPI prices has increased to $500-510/mt FOB Black Sea, up $13-20/mt within the past week.