Markets for Merchant Pig Iron
MPI is a commodity that is expected to be in strong long term demand. Continuing Asian growth, the resumption of worldwide steel production growth and reduced scrap availability from historical scrap supplying countries like the CIS is likely to see demand for EAF feedstock (scrap iron, MPI, DRI & HBI) remain firm. There appears to have been insufficient investment world wide in new MPI production capacity.
The general trend toward a higher proportion of EAF steel making for environmental and capital cost reasons creates a naturally expanding market for MPI. This was offset for a time by China's expansion in blast furnance iron making capacity but recent Chinese initiatives to close inefficient mini blast furnance operations in China seems to have reduced the amount of internally traded MPI available. China is moving from being a historical exporter of MPI to being an importer and this is expected to further positively impact the relatively small MPI market.
The largest market for metallics remains Asia, the Yalgoo Iron Project’s closest market. The major competitor in the MPI market is Brazil, over which the Yalgoo Iron Project holds a significant shipping cost advantage.
