The recent global steel rally driven by raw material cost increases has seen pig iron import price offers to the US rise from both Brazil and the CIS region. Despite the downtick in Chinese futures in the week ended November 18, pig iron sellers remain confident in their ability to retain prices steady if not possibly strengthen further in 2016. Tuesday’s upward correction as Chinese steel jumped sharply on futures surge reinforces the positive sentiment.
Sources close to SteelOrbis state that despite fluctuations in the global markets and wait-and-see stance in some global regions this week, within the US, ferrous scrap prices are expected to rise in December, US steel centers are facing low stock levels, raw steel production has been up week-on-week, list price increases in finished good prices are moving deal prices up, and capacity utilization seems to be increasing.
As a sign of revival one source stated, “In our region, some of the energy related consumers are getting busy. Operating rates for some seamless producers dipped down to probably under 15 percent this year and are now over 50 percent.” More specifically to mill demand one source commented, “Buyers are active in both the pig iron market and December scrap planning already and seem to have come to terms with the price increases.”
A large buyer of Brazilian pig iron close to SteelOrbis commented today, “Brazil producers are holding firm and are not offering us basic pig iron below $310/mt FOB Brazilian port.”
Ex Brazil offers for basic steelmaking pig iron are presently at $310-320/mt FOB Brazilian port and $320-330/mt CFR New Orleans while nodular pig iron offers are at $350-360/mt FOB Brazil and $360-370/mt CFR New Orleans. The Brazil origin basic pig iron climbed $25-35/mt in FOB terms while the CFR New Orleans numbers climbed $20-30/mt week-on-week.
Ex-CIS offers to US buyers for basic pig iron are at $295-315/mt FOB Black Sea which are up $15/mt from $280-300/mt FOB Black Sea last week. Sources close to SteelOrbis note that US buyers were heard active last week in the CIS with $280-290/mt FOB Black Sea deals for basic pig iron despite weak demand from Turkish and Italian buyers who are waiting for further confirmation on market direction.