The global pig iron markets have been active over the past week as price levels have continued their rising trend.
With improved local demand observed in the leading scrap exporting countries and Asian buyers still purchasing in the overall raw material market, global scrap prices have maintained their strength over the past week. Having filled their order books completely for July and almost completely for August, CIS pig iron producers increased their export price levels during the past week.
In the past week Russian pig iron producers increased their price levels to $295-300/mt FOB, while they were heard to have concluded deals mostly to Asia and the US. On the other hand, Ukrainian producers were reportedly offering pig iron at $255-265/mt FOB.
After previous deals from northern and southern Brazil at $270/mt FOB, Brazilian pig iron producers last week increased their pig iron price level to $300/mt FOB for August shipments. While a deal from southern Brazil to Asia was reported at this level in the past week, another deal was concluded from northern Brazil to one of the most important US finished steel producers at $290/mt FOB - in this period when the US market is actively buying pig iron. With the new deals, the pig iron production rate in Brazil has increased to 25 percent.
As of late June, in a pig iron export tender carried out by an Indian producer, offers were at $301/mt FOB. Another Indian producer which is planning to be in the market when prices will be at $300/mt and above has also opened an export tender.
Uncertainty is still being observed in European countries, some of which have already entered their holiday period while others will go on holiday in August. European traders are currently reluctant to conclude deals for pig iron as their customers are hesitating to buy large tonnages. Although demand for pig iron is currently stronger as compared to early June, there have been some difficulties as melt shops and foundries want to buy ready stock material and small tonnages. Traders in Germany and Poland are having difficulties in getting customers to accept the rising prices in their local markets.
After the recent intensive purchase activity for scrap, no great activity in terms of pig iron purchases is being observed in Turkey as the price levels acceptable to Turkish finished steel producers are not in line with the pig iron producers' desired levels. Turkish foundries, whose volumes of orders have increased, are still hesitating to buy large tonnages as they are trying to show greater caution during the summer season.
In the coming period players in the international pig iron markets will likely keep a close eye on the most active markets to see whether they maintain their activity levels, and will also closely observe the direction of the US market where stocks are melting and which, therefore, is again expected to be in the market for purchases soon.