Posted on 24 Jan 2022
Merchant pig iron prices solidified further last week despite the ongoing reluctance of spot buyers to commit to new purchases in some key importing regions.
However, producers' deepening commitments to long-term formula-based contracts secured full order books for February, while reviving semi-finished product demand further reduced merchant pig iron availability from some mills, Kallanish notes.
Having sold close to 50,000 tonnes of February-casting pig iron to Turkey at around $500-505/tonne fob Black Sea two weeks ago, a major Ukrainian supplier increased offers to $510-520/t fob last week. There were no new sales at these levels, as Turkish mills continue to exercise caution over new bookings, weighed on by pressure from soft domestic demand, a weak national currency and limited export opportunities.
Italian buyers are also reluctant to accept new offers, indicating bids not higher than $540/t cfr, which nets back to around $500/t fob Black Sea, a little below sellers' current price ideas. Additionally, the country's major steelmakers continue to receive considerable volumes on long-term formula-based contracts with a Russian and Ukrainian supplier, which amounted to around 80,000t this month, based on traders' estimates.
In the US, the only CIS tonnages en route to buyers are also those sold on a long-term basis, with no spot sales for the past month. But a 50,000t cargo from Brazil was sold at $500/t fob, equating to around $530/t cfr Nola, while another, 35,000t cargo was booked by an international trader at $505/t fob, for March loading. Brazilian suppliers are sold out until March and not seeking sales, while looking to gradually re-establish output and logistical routes affected by recent rainfall.
Ukraine's eastern breakaway Donetsk Republic-based producer Donetskstal also increased its offers from $490/t to $505-510/t fob Black Sea last week, and claimed to have sold 20,000t to the Mediterranean. However, no confirmation could be obtained by press time. Traders note supply remains sporadic and uptake is slow amid further deterioration in Russian/Ukrainian relations.
In Asia, however, China's appetite is growing, emphasised by the sudden withdrawal of Indian suppliers, which have U-turned their export efforts to the domestic market. No export offers from India were noted in the past week, but traders calculate prices would have to be around $560-570/t fob India to make it worthwhile for Indian mills to ship abroad.
As China's appetite grows, a 25,000t Russian cargo was sold at $550/t cfr China, around $15/t up on-week, for March loading. This is not yet interesting for Black Sea suppliers, as it nets back to around $490/t fob. Nevertheless, China’s buying, at a time of preparations for a quiet production month amid holidays and the Olympics, is a supportive factor for the global merchant basic pig iron market, participants conclude.
Source:Kallanish
