Sources close to SteelOrbis reported today basic pig iron selling at $330-336/mt ($299-305/nt) FOB Chicago and foundry pig iron selling at $413-441/mt ($375-400/nt) FOB Chicago.
SteelOrbis learned of offers in June at $336-342/mt ($305-310/nt) FOB Chicago and FOB Pittsburgh. In mid-July, Chicago basic pig iron decreased $11-17/mt($10-15/nt) to $324/mt ($294/nt), but following the uptick in scrap metal pricing this week and current import supply tightness, prices began to increase for contracts in process. Pig iron deals are done on a quarterly contract basis in the US domestic market, therefore, prices do not move daily as for scrap metal.
The largest exporters of pig iron to the United States are Russia, Ukraine and Brazil. Sources close to SteelOrbis are reporting ex-Brazil basic pig iron offers at $255-265/mt ($231-240/nt) and foundry grade pig iron at $300-310/mt ($272-281/nt) in FOB Brazil port while ex-CIS basic pig iron export offers are active at $230-235/mt ($209-213/nt) FOB Black Sea.
In the short-term, US demand for pig iron is expected to remain constant, with the slight possibility of a mild upward trend. The potential upward trend is not based on an expected increase in demand but rather on the tightness of the supply being imported. At the global level, the supply of pig iron remains abundant. However, at the domestic US level, imports have dropped 50 percent compared to the same January thru July period last year, and inventories are currently drawing down due to a lack of imports. Prevailing market conditions have resulted in a decrease in the volume of imported pig iron.
Sources close to the market have informed SteelOrbis that due to market conditions, largely influenced by the drop in scrap prices over the past year, importers are not bringing in a significant volume of pig iron unless they have pre-sold a large percentage of the cargo. As the competing pressures of supply and demand influence continual adjustments in market prices, the tight supply makes the slight uptick in pricing likely.