Following a lingering lull in the basic pig iron (BPI) market in terms of activity by Chinese customers, who had previously been the most active buyers for a long time, the latest booking of ex-CIS material to China has created more uncertainty among market insiders regarding the future outlook for the segment.
Accordingly, SteelOrbis has been informed of two recent bookings, done by one of the Russia-based producers, to the US and China. While a 50,000 mt cargo, for end of November shipment, was sold to a US steel producer at $387/mt CFR, another sale of 30,000 mt to China at $389/mt CFR and considered by market insiders as “far too cheap” has given rise to serious disputes in the market. “I do not have any explanation why CIS producers have started dropping the market,” a Brazilian supplier commented. “I have withdrawn all my offers. As of now, I am just waiting. I will not contribute uncertainty to the market,” he added. “A transaction to the US at $387/mt CFR means at least $400/mt CFR China… They [producers] may be sure that China will stop BPI purchases after their holiday; in any other case, I cannot understand them,” an international trader said. If a little while ago the US could not accept “the Chinese price”, it seems that now the situation is exact the opposite.
As SteelOrbis has reported previously, the most recent transactions before the abovementioned were fixed to the US at $387/mt CFR for ex-CIS material and at $395/mt CFR China for ex-CIS BPI, concluded by an international trader to China.