Posted on 06 Nov 2020
CIS pig iron exporters' turn to Asia while the US market jumped back on the fence for the presidential election has resulted in just one sale. However, suppliers expect more sales in the near future.
Tightening environment-lead production restrictions in China are seen leading to lower local pig iron production and rising demand, and the CIS being the only available supplier, market sources tell Kallanish.
A Russian mill sold a 20,000-tonne lot to China at $395/tonne cfr, on Friday last week, which nets back to around $355/t fob Black Sea, but is to be shipped from Far Eastern ports. Another Russian mill sold a 15,000t lot to Taiwan at $405/t cfr for December loading, and is negotiating another, similarly-sized lot sale with a South Korean buyer, which is likely to close at the same level, traders say.
China's demand is expected to reach $405/t cfr too, and soon. Traders explain the dynamic by the absence of alternative supply, as Brazilian material is offered at $380/t fob from distributors, for shipping in January. Another supporting factor for pig iron stems from one large Russian supplier's apparent issues with its blast furnaces, which may considerably reduce its December-output allocations, traders note.
Meanwhile, Turkey and Italy are watching the market, with sales slowing down in the past three weeks. Small lots were sold to Turkey, according to one seller, at around $350/t fob Black Sea. And a European buyer booked a small lot at $375/t fob.
Some observers are sceptical about the possibility of further increases due to wide-spread European lockdowns. However, "…US and Chinese demand, if it comes now, will sweep off remaining tonnages and keep prices at $355-360/t fob for another month," one trader concludes.
Source:Kallanish
