Pig iron prices decline at slower rate than scrap prices

Even though scrap transaction price levels in Turkey have declined by $15-20/mt over the past month, the rate of decrease for pig iron prices has been slower. Transaction levels for ex-US scrap in Turkey have softened to $365/mt CFR, while the price ideas of Turkish mills and traders for pig iron are at $380-390/mt CFR. However, these levels seem unrealistic for pig iron suppliers at the moment. CIS pig iron suppliers have cut their offers by a maximum of $5-10/mt over the past month and ex-CIS pig iron offers are currently available for Turkey at $385-390/mt FOB. Meanwhile, it has been reported that CIS producers' pig iron sales to other markets are performing better than their sales to Turkey.
 
Pig iron prices are also expected to slide down in the coming days, at a time when prices of iron ore, scrap, semi-finished steel and finished steel are on a declining trend. However, pig iron mills state that the difference between their production costs and pig iron sales prices is almost nonexistent and so further price cuts for pig iron would mean the absence of any profit margin in sales. Demand is unlikely to register any notable improvement during the summer season in the raw material markets, while pig iron prices are anticipated to hover at around $380-400/mt FOB Black Sea during the next three months.