Posted on 16 Apr 2020
The increase in Turkish scrap prices has opened up the country's pig iron import market. Transacted prices are level with previous China-bound sales, resulting in a hefty increase in fob Black Sea prices.
Turkish mills have bought a total of around 40,000 tonnes of pig iron from Russia and Ukraine this week. The June-loading material was contracted at $300-305/tonne cfr Turkey, netting back to around $285-290/t fob Black Sea, $20/t up on last week's levels, Kallanish notes.
Chinese buying interest remained at around $300/t cfr, while some traders say China is targeting levels as low as $280/t cfr right now, depending on volume. With Brazilian offers at $290/t fob, possibly negotiated down to $280/t fob, these levels are still not achievable. CIS pig iron, with its full May books and some June books already contracted, is also unlikely to find its way to China at these levels. This is especially as more demand from Turkey is expected this week at new, higher levels, traders say.
Meanwhile, the US market remains silent. With large volumes contracted in the first quarter, these arrivals “…will last them until September,” one trader notes. The pressure to sell while its largest buying market is not booking may push Brazilian suppliers to compromise on prices. However, at $280/t cfr, some producers are already touching upon their production cost levels, sources note.
Italy, although already slowly beginning to restart output at idled facilities, will take a little longer to come back to booking pig iron, sources say. With scrap prices softening in the country for April deliveries (see separate article), it is not clear how Italian mills will re-enter the pig iron import market, or when, traders note.
Source:Kallanish
