Upticks of over $10/mt in import iron ore prices in China this week have encouraged pig iron producers to keep their prices firm. International pig iron manufacturers claim that their production costs are already high and further increases in iron ore prices makes it inevitable that mills will hike their pig iron offers.
Pig iron demand in Europe has remained strong during July and in particular some deals have been concluded from the CIS to Italy. Due to the summer holidays in European markets, pig iron demand in August was expected to be weak. However, ahead of the last quarter of 2013, in which the steel markets are expected to be more robust, steel mills have started to place orders for autumn deliveries and so pig iron demand in Europe has remained on the strong side. Meanwhile, Ukrainian producers' pig iron offers are now standing at $400/mt FOB, while the latest transactions between Italian buyers and CIS suppliers have been concluded at the range of $425-435/mt CIF Italy. Italy has been the most important buyer for Russian and Ukrainian pig iron suppliers. As it can be seen in the SteelOrbis import-export statistic section, in the January-April period this year Italy accounted for 50.7 percent of Russia's pig iron exports and 36.3 percent of Ukrainian pig iron exports.