In the absence of China, apparently the main customer within the current year, global basic pig iron (BPI) suppliers have no intention to step back. Most of them prefer not to give firm offers, while some of sellers give initially overvalued offers, aiming to accelerate further increase of prices. A growing demand from the US customers due to the rising capacity utilization rates of local steel mills amid favorable market conditions gives an additional strong support to the global BPI sellers.
International traders increasingly redirect their shipments of BPI, initially destined for the Chinese market, to the US, aiming to achieve higher margins. Accordingly, SteelOrbis has learned of at least two bookings of ex-Brazil BPI cargoes to the US lately, both for prompt shipments. Following one deal signed at $520/mt CFR at the end of last week, another contract was already closed at much higher level, however, the exact deal price has remained undisclosed. Some sources discuss the cargo was sold at $550/mt CFR, while other state that it was signed in the range of $560-570/mt CFR. “Under current circumstances, when prices in the US have much exceeded $500/mt CFR, even in case of penalties it makes more sense for traders to shift their cargoes to the US instead of China where the latest level fixed in the deal was a bit above $400/mt CFR,” an international trader stated. “Overall, the sentiment deemed to prevail pretty bullish with literally all fundamentals indicating a further support,” another trader commented.
Meanwhile, ex-CIS BPI indicative offers have been voiced at $570-600/mt FOB Black Sea. However, the above-mentioned range is still not included in SteelOrbis’ assessment, as no deals have been fixed at this level. One cargo for 20,000 mt of ex-Ukraine BPI was sold to international trader at $490/mt FOB Black Sea about 10-12 days ago, for the first half of February shipment. The material is destined to Turkey. In addition, one more lot was sold to Turkey at $520/mt CFR, for prompt shipment, SteelOrbis has learned.