Merchant pig iron trading activity in the Black Sea export market was focussed narrowly on the Mediterranean and wider European markets in the past week, with limited trading volumes.
The past week has brought no US trade to either CIS or Brazilian suppliers, as US buyers continue to reject offer indications. These remained flat on-week from CIS suppliers, but increased quite considerably from Brazil.
Brazilian suppliers were heard indicating offers at $575-590/tonne fob in the past week, with some sources reckoning one sale took place at $620-630/t cfr. This could however not be confirmed at the time Kallanish went to press.
CIS suppliers’ offer indications were up to a rather wide $600-630/t cfr, but no trade was possible as US buyers look set to continue waiting with purchasing until after the domestic May scrap price settlement. As this is expected to be upwards from current levels, market sources foresee some CIS offers being finally accepted.
Meanwhile, small lots of CIS pig iron continued to be traded to Europe and Turkey at $590-595/t cfr, and $620/t cfr for semi-nodular material. Current levels of demand have supported a $10-15/t price rise on-week.
China’s plans to reduce exports of finished steel and increase imports of semi-finished steel and metallic products suggest there could be another surge in demand from China, eventually, but this is not expected imminently. Most likely, this demand will come, if at all, towards the fourth quarter, when restrictions are likely to intensify, sources say.
As prices continue to rise, the volume of formula-based long-term contracts outside the spot market has also increased, as buyers and sellers aspire to manage volatility. This trend may also intensify in the coming year, as volatility is unlikely to subside, and will depend a lot on China’s metallics buying.