Posted on 06 Jun 2025
The Italian pig iron market is seeing subdued activity, amid low demand and offer prices that are perceived by buyers as elevated, despite limited availability of alternatives to Russian material, Kallanish notes.
Ukrainian producers are withholding offers, opting instead to pursue higher pricing opportunities in the US market, where they are selling at $455/tonne cfr on average. This excludes the circa $50/t duty, which is shared between supplier and buyer. Previous quotes to Italy were at $440-450/t cfr.
Brazilian pig iron is being quoted in Europe at $400/t fob Brazil, a price that is viewed as excessive in the Italian market.
There is sizeable pig iron inventory at the primary Italian steel port of Marghera, with a portion of it already allocated to buyers. A major mill that typically acquires substantial volumes of pig iron is presently not in the market, having secured more cost-effective Russian-origin material prior to the depletion of the EU quota.
Two other mills have accumulated sufficient pig iron inventory and will refrain from purchasing additional material in the coming months.
Italian mills are refraining from acquiring new pig iron lots, primarily due to elevated pricing. Instead, they are opting for the procurement of scrap, lower-cost billet, and ferroalloys.
Last month, Indian pig iron was quoted at $370/t cfr Italy; however, the quality of this material is poor and it appears there have been no purchases made. Distributors are currently seeking price quotations from producers in Ukraine.
Due to payment issues, sellers now prefer not to sell pig iron to Italian foundries. The sector is currently experiencing significant financial challenges, with an increase in payment defaults being observed. The National Foundries Association (Assofond) indicates the segment is facing a decline in demand, which, combined with regulatory uncertainty and geopolitical tensions, is increasing companies' vulnerability to international competition.
In 2024, Italian foundries production declined by 12.3% compared to the previous year, and turnover decreased 12.8%. “We are not facing a simple economic crisis but a decline that risks becoming irreversible. For foundries, for Italy, for Europe. If we do not intervene immediately, the risk is not only the loss of competitiveness; it is the very ability to produce,” warns Assofond president Fabio Zanardi.
In a previous interview with Kallanish, Zanardi said the depletion of Russian quotas presents challenges primarily due to quality. From the perspective of pricing and the refining process, Russian pig iron stands out as the best option. Indian material lacks the quality necessary to serve as a viable substitute. Brazil involves a considerable distance and high cost while Ukrainian material pricing exceeds that of Russian pig iron.
Source:Kallanish
