Posted on 03 Sep 2020
CIS pig iron export sales have perked up in the past week, with all traditional destinations making bookings, including the US where negotiations were taking place the week prior.
A Ukrainian supplier sold a total of 120,000 tonnes to US buyers, in three lots, with one small one due to be loaded already this month. Sales concluded at $358/tonne cfr Nola for all three lots, netting back to around $338-340/t fob Black Sea. A Russian supplier also sold a lot to the US, at $340/t fob, Kallanish hears.
Market sources expect demand from the US is only just beginning to return, in expectation of increasing prices. The US domestic scrap market is seen gaining around $30/t this month and output is being ramped up.
China remains in the market for imports, and booked two Russian cargoes supplied by two producers, at $378/t cfr, just a few dollars below offers. The two 50,000t cargoes will be loaded in October, traders say, and net back to around $340/t fob net to the seller, accounting for traders' margins. Demand is described as steady despite the ongoing rise in China's own pig iron output.
Italy has also booked at least one Russian cargo, again, at $340/t fob. This was another long-term contract-based sale, but negotiations are still ongoing for Ukrainian material, sources note. Turkey booked a small lot from Russia, again at a net back price of $340/t fob, and is expected to book more amid rising scrap prices and buoyant flat products sales.
Sellers expect prices are still on the rise, and do not rule out $350/t fob to be achieved already in this round of sales. This will depend on the extent of US demand returning, and the European market dynamic, along with China's willingness to ramp up bids. Kallanish assessed fob Black Sea pig iron export prices at $340-345/t on Wednesday.
Source:Kallanish
