Posted on 14 Feb 2022
Global merchant pig iron sentiment continued to strengthen last week, with new sales concluded at higher levels amid increased enquiries, Kallanish learns.
One Italian buyer, pushed by rapidly diminishing port stocks and low CIS spot availability, accepted higher offers and booked a large Brazilian parcel at $540/tonne fob Brazil. The 35,000-tonne late March/early April-loading lot is estimated to cost and freight at around $585-595/t cfr Maghera.
The sale has propelled new offers from Brazilian sellers of up to $540-550/t fob, rising to $560/t fob from some suppliers later in the week. This also interrupted several other negotiations with European buyers, which were circling $530-535/t fob levels, traders say. Italian buyers, the majority of whom are still bidding at maximum $580/t cfr, may have run out of options amid a lack of other offers, with sales this week expected to continue at new higher levels, they add.
Turkey also booked a large, 50,000t Brazilian pig iron lot for April loading at $520/t fob, with freight also estimated at around $50/t, meaning $570/t cfr Turkey. This is much lower than offers of smaller lots from CIS producers and stockists at $580-590/t cfr. No other direct sales to Turkey were heard last week, but a trader booked around 20,000t from a Ukrainian producer at $550-555/t fob Black Sea, for Turkey or Italy, according to participants.
There was talk of the trader buying around 30,000t from the breakaway Donetsk Republic's Donetsksteel works at $550-555/t fob, but this remained unconfirmed before deadline.
These sales continued to fuel sellers' bullish mood, with some offers now in the market at not below $580/t fob, although, in general, quotes are now extremely scarce from the CIS and Brazil. One Ukrainian supplier is out of the market, covering long-term contracts only, and with Russian pig iron suppliers not offering, demand outstrips supply by far. This is confirmed by European mills increasingly considering using merchant material in their charge, traders confirm.
The April-shipment cargo sale moved Brazilian exporters to indicate higher offers, ranging from $520-540/t fob, depending on region. A pig iron trader simultaneously gave Brazilian price indications at $550/t fob for subsequent sales.
US buyers remain passive in sourcing spot pig iron cargoes, with sentiment dampened by the drop in domestic scrap settlement prices (see Kallanish passim), but they are making soft enquiries, one CIS supplier confirms. He adds he does not have large enough availability to send even one cargo to the US. Traders estimate cfr Nola prices at $550-560/t cfr, still too low to work for either CIS or Brazilian suppliers, and apparently too high for US buyers.
In Asia, Chinese traders' interest rose to around $560-570/t cfr, also too low for CIS and Brazil to consider seriously. Interest from Japan and Taiwan was higher, at $590-600/t cfr for traditionally smaller and prompter cargoes, but no sales were heard. Indian material is still absent amid the domestic market rebound scooping up availability, traders note.
Source:Kallanish
