Uncertainty still surrounds purchase activity and price levels in the international pig iron markets, since the anticipated increase in pig iron demand in September has yet to be observed, and, in addition, the markets which are the most important purchasers of pig iron continued to maintain their silence last week.
Russian producers' pig iron offers given to the European markets are standing at $330-340/mt FOB. Upon the conclusion of the holidays at the end of August, there was a certain recovery in order numbers from melt shops and foundries in some European markets, such as Spain and Germany, where the positive indications pleased pig iron traders. However, in the month of September an atmosphere of uncertainty has seemed to continue in Spain and Germany as well as in the Benelux region and Italy.
Difficulties as regards material supplies in Ukraine, the fullness of the larger Ukrainian mills' order books up to November and the nearest shipment dates being in mid-November have prevented actual market prices from being formed in Ukraine.
Following the latest sales concluded from southern Brazil at the level of $315/mt FOB, no new booking has been heard from this region, since China, the most important buyer in the international pig iron market, has been maintaining its silence. If China were to decide to purchase material, acceptable levels to Chinese buyers would be around $350/mt CFR; thus, it is seen that this level is not compatible with the southern Brazilian prices. The most recent sales concluded to the US by Brazilian mills, which have increased their capacities after the sales concluded to this destination, have been at $325/mt FOB.
Pig iron demand has been trending stable in the Indian domestic market where the last export tender has been realized at $336/mt FOB.
Turkish steel mills' absence from the scrap markets for a few weeks has also affected demand for basic pig iron. Also, due to the uncertainty in the scrap markets, no definite price level has been fixed in the pig iron market. On the foundries' side in Turkey, the anticipated increase in the number of orders of firms that mainly work for the export market has not been observed and this has been forcing foundries to wait instead of purchasing.
Through the remainder of September it is likely that the international pig iron markets will try to determine new price levels by focusing on newly-formed scrap prices and will continue to wait for China to return to the market.