US imported pig iron prices firm up, but near former levels

The pig iron market has experienced a leap in prices since October.  Import offers from the CIS region and Brazil jumped substantially in late October and into mid-November due to increasing raw materials prices.  Since the week ended November 25, FOB offers have oscillated in relative proximity.  Since the last report in the week ended December 2, CIS origin FOB Black Sea offers for basic steelmaking pig iron have moved the bottom of the range up $5/mt, FOB Brazil port offers retreated $5/mt from the top of the range, CFR East coast port offers tightened the bottom of the range up $10/mt, and CFR New Orleans moved the bottom up by $10/mt while also increasing the top of the offer range by $5/mt. CFR offers are said to have increased slightly more as a result of increasing freight rates.

Pig iron offer price ranges have tightened despite some faltering in the Chinese steel and futures markets.  US pig iron buyers were anticipating a downward market correction into this week, but note that the Chinese rebound, recent increase in US scrap prices, and positive sentiment about upcoming long-term coking and iron ore coal contracts are solidifying market direction.

Despite several drastic fluctuations in the Chinese market in the last several weeks, offer prices for finished steel goods have continued to trend upwards globally. Some buyers have questioned the sustainability of the increased offers in the last several weeks contributing to weak deal volumes, but according to market sources close to SteelOrbis, “It is common for some delay in adoption when prices move up, and, presently, end of the year cash dynamics has probably added to the hesitation by buyers.”  Purchases are believed to be getting delayed due to end of year cash management along with the desire for further market confirmation, but order volumes are expected to rebound in 2017, especially, as prices become perceived as good buying opportunities on an upward moving curve.