Posted on 26 Apr 2019
It has been another quiet week in the CIS pig iron export market, punctuated by just few customary sales, with no bulk tonnages sold or discussed, Kallanish learns from market participants.
Mills' indications remain in the range of cfr prices that net back to around $345-350/tonne fob Black Sea, but buyers' commitment to pay less for late June/July shipment material has kept trade away. And there is little to indicate buyers will change their mind imminently, despite peaking iron ore and coking coal prices. Their price idea this week is at least $10/t down week-on-week. This is due to the expectation of a softer scrap market in the US in May, and a possibility of summer maintenance outages lasting longer than usual, increasing the availability of feedstock.
A decisive majority of market participants expect a quiet May, with a string of holidays having already started with the Easter holidays in Europe and US. National holidays in the CIS and Ramadan in May will further dampen market activity and soften the dynamic.
This indicates that CIS pig iron export prices are likely to continue to soften. This is especially so when coupled with high iron ore and coking coal prices and lack of fundamentals for a major steel price increase in major steel-using economies in the summer. The sentiment is further emphasised by relatively high availability, and ongoing competition with suppliers from the Ukrainian breakaway Eastern republics, typically priced around $20/t below mainstream material.
Kallanish assessed fob Black Sea pig iron price at $335-345/t on Thursday, -$5/t down on-week.
