Steel producers in the Turkish market are now observed to have delayed their raw material purchases due to the contraction seen on the finished steel side, but managed to replenish their stock levels with raw material supplies delivered in May. Also, it is observed that Turkish mills have delayed basic pig iron purchases as well as scrap purchases. As for foundries, those which mainly serve the automotive and white goods industries have continued to obtain orders due to the discount in the private consumption tax in Turkey, and their production outputs have recorded increases as compared to previous months. In the Turkish domestic market, local mills' basic pig iron sales prices have continued to stand in the range of $320-350/mt + VAT, while their foundry pig iron prices are still at $380-400/mt + VAT.
On the other hand, Russian pig iron mills' export offers given to the European markets have this week maintained their levels of $270-280/mt FOB. Some steel mills located in western Europe have made purchases, even if for low tonnages, due to diminished stock levels; meanwhile, demand from Asia is still robust. As a result, the policy of the Russian mills has been not to decrease their offer levels. The most recent bookings concluded by Russian mills to the Asian markets are standing at the level of $295/mt C&F Chinese ports.
Meanwhile, it is heard that China, which is an active buyer in Asia, has concluded basic pig iron bookings from Japan suppliers at the level of $290/mt C&F.
As for the Brazilian market, mills have revised their export offers given the continuing rise in strength of the Brazilian real against the US dollar, with offers given from southern Brazil at $270/mt FOB and from northern Brazil at $280/mt FOB. In particular, increased freight costs in the Asian market and real's increasing strength have caused difficulties for the Brazilian mills as regards competing in this market. It is said that acceptable levels in the Asian markets according to the Brazilian mills are at $320/mt C&F.
Local mills in India have decided to raise their domestic prices by an average of $20/mt, against the background of strong demand in the Indian domestic market. It is expected that Indian mills will focus their attention on the export markets again in the month of June. The new price considered by Indian mills for new export tenders is at $300/mt FOB.
In general, it seems likely that pig iron traders and producers are likely to continue to experience problems in the short term due to the lack of demand in the finished steel markets, the possible demand contraction in the global pig iron markets that is expected to be seen with the commencement of the summer season, and, above all, due to the delay in concluding the annual iron ore contract negotiations, which means that business continues to be conducted at last year's prices.