CIS pig iron remains hot commodity

Posted on 21 May 2020

Source: Kallanish

CIS merchant pig iron prices have notched up again in the past week, fuelled by ongoing buying interest from China and the US. This has encouraged more purchases by Mediterranean buyers, Kallanish hears.

The freshly-signed $3 trillion US stimulus package and approaching grain season are about to up the ante in the ferrous products export markets. Rail routes to all – Western and Eastern – Russian ports are already becoming heavily congested, hampering logistics and slowly driving prices up, market sources say. In Asia, buyers are already enquiring about August-production availability, aware of lengthening queues on export routes, they say.

China continues to increase its bids for imported pig iron, with traders expecting $320-325/tonne cfr to be contracted this week for imported material. A small parcel sold by a Russian mill at $315/t cfr last week is considered too low a price for today, as Chinese demand is not showing any signs of abating. More demand for imported downstream products is emerging daily.

US demand is about to explode, say a couple of sources, on the back of the stimulus measures, and is also expected to extend further downstream. There was an offer of a Russian cargo at $315/t cfr Nola, netting back to a minimum of $300/t fob Black Sea, which may have been accepted by Kallanish press time. Long-term contracts have been delivered at $290/t fob equivalent, sources say.

Meanwhile, Italy and Turkey are buying small lots at around $310-305/t cfr, respectively, running the risk of having to significantly increase their bids in order to secure material in time for August arrivals. With scrap expected to rise to $270/t cfr in Turkey for HMS 1:2 80/20 premium grade by mid-June, according to some traders, demand for pig iron will increase further. However, there is unlikely to be much summer volume left at that time.

Market participants anticipate a rebound in freight rates in June fuelled by the grain season. Added to existing logistical issues due to the re-direction of metal to export markets clogging up routes, sources expect difficulties in shipping on time. Both demand and supply appear to have risen significantly at the same time, they conclude. 

«  Back

Copyright © 2016 SEASI Site. All Rights Reserved.