A rising trend continued to be observed in the past week in the international pig iron markets. Due to the strong scrap prices and the full order books of some pig iron producers for the coming month, the uptrend in price levels has been sustained.
Russian producers have increased their export prices for Europe and the Middle East to $275-290/mt FOB Black Sea. Also, it is reported that a Russian producer has declined to sell at below $300/mt C&F Europe and Middle East. Considering the lack of material for prompt shipment in the market for the time being and also the strength of the scrap markets, Russian producers are collecting offers for materials for June and July shipment.
It is observed that the Russian producers are selling mostly to southern regions in Europe at the moment. Due to the decreasing stocks of some Italian and Spanish foundries and meltshops, these companies have started to ask the Russian producers for material. With the governments in Germany and France announcing their support for cheaper automotive sales, the amount of orders booked by automotive producers in Spain in particular (and booked by foundries in this country accordingly) have registered an increase as compared to recent months. The capacity of foundries working in Spain has increased to sixty percent for the time being. In spite of this, traders from central and northern Europe do not consider the Russian producers' offers to be workable since the customers of the traders in question are refraining from long-term purchases.
In the Far East market Chinese traders were observed to be active in buying in the past week. It is also observed that the Chinese buyers in search of prompt loading have fulfilled their needs with deals concluded from Japan. SteelOrbis has been informed that the Japanese traders have taken advantage of this situation and worked diligently for sales of pig iron at $280-285/mt C&F Chinese ports.
It is observed that the Brazilian pig iron producers have been experiencing difficulties in sales to China, which was the only buyer in the last week. In consideration of the international market prices and also anxious not to incur losses, producers in both the north and south of Brazil have increased their pig iron prices to $250/mt (in south) and $260-265/mt (in north), both on FOB basis.
Meltshops in Turkey were seen to be purchasing mostly scrap in the last week. However, these meltshops are currently observing conditions in the local market for pig iron purchases.
In general, it is possible that developments on the demand side will affect customers' decisions in May as regards summer shipment purchases. On the other hand, the dynamics of the overall market conditions will shape the response of the producers.