Some destinations have accepted higher CIS merchant pig iron offers, but the US and China remain out of the market, as feedstock price volatility continues.
In a relatively quiet week, only a couple of small lots were sold to southern Europe, to traders, by a Ukrainian supplier, but at a considerably higher price than previous sales. A 10,000-tonne lot was booked at $680/tonne and a 5,000t lot at $685/t cfr, netting back to around $655-660/t fob Black Sea, Kallanish calculates.
Turkey is reported to be in the market, and with scrap exceeding $500/t cfr for premium HMS 1/2 80:20, may also take time to haggle, having booked the last pig iron lots at $620-630/t cfr. Offers remain at higher, in line with southern Europe levels of at least $700/t cfr, based on Turkish finished products prices and scrap gains. But buyers are resisting, aware of Chinese developments and US buyers’ stance, as well as short lead times with June loading tags.
Even bigger pressure is presented by Donetsk pig iron re-appearing in the market. Two months’ worth of this was booked by traders at a wide range of $540/t and $630/t fob for May and June production, respectively, for the Italian market. A total of up to 80,000t was booked and will be delivered starting in mid-summer, traders note.
In the US, the standoff continues with buyers on the fringes of the market back to roughly the same price idea as two weeks ago – $630-640/t cfr. Several sales were being discussed when Chinese prices were rising, but they appear to have been abandoned after the Chinese futures downturn and government intervention to cool the market.
Sellers persist with offers ranging from $690-750/t cfr Nola, depending on the supplier. Given the sentiment for scrap prices remaining on a rising arc, it is unlikely sellers will reduce offers, unless there is a drastic reduction in finished steel or feedstock prices, traders say. A few Brazilian cargoes were heard changing hands at $620-630/t fob during the past week, mainly below initial offer levels.
Although China’s interest has faltered somewhat, an Indian June-shipment cargo was booked at $640/t cfr, with more being negotiated. India is also offering to the US, at $680-690/t cfr, sources observe.