Posted on 14 May 2021
Merchant pig iron prices have increased over the past week, buoyed by iron ore, scrap and finished product increases.
Although activity remains low, China's stirring interest to import is instilling confidence in sellers to raise offers, having at the same time alerted some previously fence-sitting buyers to act. This resulted in several sales at higher than last week prices, Kallanish notes.
More selling activity was noted in the western hemisphere, while CIS suppliers persist with higher offers. Several Brazilian cargoes were traded in the past week, at prices ranging from $580/tonne fob south Brazil for two 30,000t cargoes to a trader and a Turkish steel mill, for mid to late summer loading. Another supplier sold a consignment to a trader at $590/t fob. This followed by an increase to around $640-650/t fob mid-week, on the back of low availability and growing domestic demand, amid ongoing prices rises along the entire production chain.
US buyers remain on the fence, with only two deals heard, one at $620/t cfr Nola late last week and another at $630-635/t cfr Nola this week, from Brazil. Market participants opine the US buyers are coming to terms with the new higher pricing paradigm, and Chinese enquiries are pushing them to secure material. Several buyers indicated interest at $640-650/t cfr Nola for CIS material, but no deal was heard.
Meanwhile CIS sellers are either inviting bids, or giving indications ranging $640-700/t fob Black Sea, which some US buyers are said to be "considering," but which is not yet workable in China. Late last week Ukrainian pig iron was booked in Italy at around $635/t cfr, netting back to around $620/t fob. As the sale concluded before iron ore and scrap gaines of past week, this price is no longer available.
As the prospect of China entering the market is growing, so is the buying activity bound to increase, participants agree. Currently indicating prices in line with US buyers - around $650-660/t cfr, the destination remains out of interest for both CIS and Brazilian producers, but Indian material was sold to China at around $580/t cfr last week. More Indian pig iron is likely to be traded to China at higher prices this week, traders concede.
Source:Kallanish
