In the Turkish domestic pig iron market, local steelmaker Kardemir has not updated its price list since January 14. However, SteelOrbis has been informed that, with the influence of the softening of import scrap prices for Turkey, Turkish foundries have been able to purchase pig iron supplies at slightly cheaper levels as compared to Kardemir's official sales price.
According to Orbis Steel Index, import scrap prices in Turkey have dropped by 1.78 percent as compared to the previous week. Unlike import scrap prices, pig iron prices have continued to remain strong. Meanwhile, iron ore and coking coal prices are expected to be readjusted with the return of the Chinese market from its Spring Festival holiday.
Just after Russia's New Year holiday, Rusia had concluded some pig iron transactions to the Far East and Italian markets. After these transactions, Russia has begun offering pig iron this week to Poland at $550-560/mt DDP for late February and March shipments. However, buyers are reported to be adopting a wait-and-see stance as regards new purchases amid the increased price levels.
On the nodular pig iron side, import offers given to Turkey have increased by $65/mt from January to February this year to $650-660/mt CIF. For nodular pig iron offers to be delivered in March and April, pricing is expected to be clarified in the coming days.
While most Turkish foundries are conducting capacity expansion works nowadays, some foundries which previously increased their inventories are adopting a wait-and-see policy as regards new pig iron bookings. Other foundries with low pig iron inventories, however, are continuing their pig iron purchases despite the increased prices.
The main problem that Turkish foundries have been facing is the difficulty of immediately reflecting increased production costs (pig iron prices) in their final product sales prices - as is the case also for finished steel producers.