Pressure has eased in the Black Sea merchant pig iron export market after Russian and Ukrainian suppliers sold several October production lots to China. There were however no such sales of pig iron to China this week. Chinese arbitrage has nonetheless enabled CIS mills to offload their volumes in time for the US buyers to begin enquiring after a month and a half long hiatus, Kallanish notes.
A total of five Handymax sized lots were sold by two Russian and two Ukrainian vertically-integrated producers, Kallanish calculates, at $320-325/tonne cfr, netting back to $280-285/t fob Black Sea with prompt shipment. Chinese mils also booked Brazilian pig iron, roughly at the same prices, but bids have slipped in the last few days, as the Chinese ferrous market began to soften.
Although CIS producers could in theory continue to sell to China at around $5-10/t lower, the return of US buyers to the market has shifted their attention westwards. Suppliers indicated offers exceeding $300/t cfr Nola, sources say, with expectations to close at slightly sub-$300/t cfr levels amid the bidding shortage. This was punctuated also by Brazilian suppliers' full books until the year end, and despite the US domestic scrap market having settled at $30-40/t down depending on the grade for October deliveries.
The Mediterranean pig iron market remained subdued, although some tension was palpable, as scrap prices in Turkey continue to rise and Italian pig iron portside stocks were depleting fast. A cargo arriving in Italy from Brazil was booked three months ago at around $50/t above current prices. This is likely to force distributors to hold the material in a hope of rebound and minimise the possible losses. supported by relative shortage of supply from some CIS mills.