The world's most influential raw material markets, namely the Chinese iron ore and Turkish scrap markets, are both on a downtrend due to low demand, and this is dragging the steel markets down as well. Import iron ore prices in China have decreased by about $10/mt since early May and weak steel demand is putting more pressure on raw material prices. In the meantime, Turkish mills' import scrap prices have also indicated significant drops.
These decreases in raw material prices, as expected, have affected pig iron prices. Accordingly, ex-CIS pig iron offers to Turkey have come down to $450/mt CFR, from $480/mt CFR in early May, while the latest pig iron transaction from Ukraine to Turkey has been concluded at $435/mt FOB.
Even if raw material suppliers attempt to push up their prices in the near future, the markets are unlikely to accept such increases amid fairly weak steel demand.