As of the last week of April and the first week of May, no significant developments were seen with regard to demand in the global pig iron markets and no considerable changes were observed in the offers given by pig iron producers due to the scrap booking levels' maintaining their strength.
It was observed that Turkish steel mills had showed demand for basic pig iron, following the massive scrap bookings concluded by them in the 17th week. However, it has been expected that the mills would intend to determine their purchase prices for basic pig iron, with the new bookings to be concluded in the following weeks.
Against the background of continuously increasing scrap prices in the bookings, in particular at the end of April some mills concluded Russian and Ukrainian origin basic pig iron bookings nearly at the same levels as compared to recently concluded scrap bookings. These basic pig iron bookings were at the levels of $265-270/mt for June shipments. Last week, it was also observed that steel mills negotiated on price levels with pig iron suppliers. However, it is expected that new bookings will only be concluded within this week, since price idea of mills have not satisfied pig iron suppliers.
It is observed that, as of May, Russian pig iron producers' export offers have been maintaining their levels seen in the previous weeks. Russian mills continue to give offers for Europe in the range of $270-280/mt FOB. However, it is heard that mills have given offers in the range of $280-290/mt C&F, for some European traders who will purchase high tonnage pig iron. Meanwhile, Ukrainian producers' export offers for pig iron are standing at the levels of $240-245/mt FOB.
As for the Far Eastern market, it is seen that Chinese traders are in the market for seeking materials, following purchases concluded from Japan in particular in the previous weeks. However, the prices have risen from the range of $280-285/mt C&F to $300-310/mt C&F, due the influence of the increases seen in the freight markets. For this reason, Chinese traders have not leant towards the recent offers. On the other hand, the mills which have located in the countries that continued to purchase raw materials, i.e. Malaysia and Vietnam, have intended to buy materials in the range of $280-285/mt C&F. However, traders have had difficulties to conclude bookings at these levels.
Last week, in the Indian domestic market prices decreased by average $20/mt; consequently, basic pig iron prices fallen to the level of $302/mt, excluding taxes. Meanwhile, it is observed that Indian traders have been seeking import materials to purchase, due to the high price levels in Indian domestic market as compared to the global markets.
In Brazil, no significant improvement has been observed in terms of demand and freight costs have increased. These two factors have caused difficulties for Brazilian producers to do business. Also, still uncompleted annual iron ore contracts have caused difficulties in terms of cost calculation in the local market.
On the foundries side, no considerable increase is observed in terms of production capacities in western Europe. This situation has led traders to delay their purchases. It is seen that small and large scale Turkish foundries which serve for automotive and white goods sectors have started to get more orders. The foundries in question have purchased basic and foundry pig iron. In the sales prices of a mill in the Turkish domestic market, basic pig iron prices are in the range of $330-350/mt + VAT, while foundry pig iron prices are at the levels of $390-400/mt + VAT.
It is thought that producers and traders will try to conclude their agreements within May just before the holiday season; however, it is important how the developments that will be seen in the global demand will affect pig iron markets in May-June period.