Pig iron prices in Europe’s import market are almost unchanged since late July as buyers have been inactive due to the holidays in August and demand is still close to zero. Steel mills in Europe have faced difficulties in finished steel sales and seen some price declines locally, so they are counting on lower deal prices for raw materials later in September. Also, some alternative pig iron shipments have arrived in Europe, so buyers may keep purchases from ports at prices which are not so high.
Offer prices for import pig iron for October shipment are at $425-430/mt CFR at the lowest from traditional sources like Ukraine and Brazil, but some higher levels have also been voiced in the market. Nevertheless, while over a month ago some sales at near $425/mt CFR were possible and were in fact done, at the moment market sources see buyers targeting levels at $400-410/mt CFR.
Weak demand for October shipment as well as for material already stocked in Europe has been the main reason for the downside pressure, but prices have failed to fall and are unlikely to drop a lot, at least from traditional sources, as they manage to sell at stable levels to the US. In particular, Brazil and Ukraine sold at $430-440/mt CFR in the last round of sales to the US.
Meanwhile, the pressure on prices has increased from alternative pig iron supplies. In particular, in August around 22,000 mt of ex-Zimbabwe pig iron arrived in Italy. And though the price level for this material has not been confirmed by the time of publication, market sources believe it should be close to $400/mt CFR. Also, some earlier booked Brazilian basic pig iron volumes, booked at slightly above $410/mt CFR in late July, have already arrived in Europe as well. “This was a unique situation when the Brazilians were sitting on big stocks, and the US market was closed due to the expected tariffs - they had to give this price, but not today,” a trader commented. “Offers from different countries such as India, Zimbabwe, Kazakhstan, Indonesia and Brazil could be heard, but nothing firm has been negotiated,” a Europe-based source said. One more trading source commented, “I am not trying to investigate [the cheaper offer for alternative pig iron] much, as in any case if there is no demand, there is not much to discuss.”
The reference price for imported BPI in Europe has remained stable at $400-425/mt CFR so far until new deals are heard in the market.