Posted on 02 Apr 2020
Pig iron prices are declining sharply internationally, Kallanish notes. The Italian market is static meanwhile due to the coronavirus pandemic and will soon have to deal with the issue of short supply. Prices are seen increasing sharply when the market resumes due to low availability. This is particularly so from the CIS regions and from the self-proclaimed Donetsk Peoples’ Republic (Donbas), which supplies cheaper pig iron, very popular among Italian steelmakers.
No purchases from CIS producers have been evident in the past two weeks. Italian foundries and mills which saw reduced levels of activity last month have completely halted operations from 25 March until 3 April. The latest contracts for pig iron from CIS producers in the second week of March were settled by distributors at $355-360/tonne cfr for April boarding.
Material in consignment at ports is depleting. Contracts for pig iron stocks were signed at the equivalent of $365/t cfr, Kallanish hears. However, since then CIS pig iron has been sold to China at $325-335/t cfr (see Kallanish 25 March).
Since the pandemic began in Italy, sellers have been dealing with ship owners who are refusing to send vessels to Italy for fear they might be stranded in the country due to coronavirus restrictions. Any contract for April delivery therefore may be postponed.
In Italy, the steel sector expects the current lockdown to be extended until after 3 April, Kallanish notes.
Source:Kallanish
