US pig iron market still slumping alongside weak demand

There is not any significant improvement to be observed in the US pig iron market in recent weeks. US pig iron demand remains weak despite the limited global supplies.

Pig iron from Brazil, the dominant supplier of this material to the US, is still offered at about $270 /mt FOB Brazil, though supplies have tightened due to the prolonged shutdown of many pig iron mills. Suppliers had been trying to push the price up to $280 /mt FOB in recent weeks; however, this price level was not accepted by the market.

Nevertheless, despite the weak demand for pig iron, with very little prime grade scrap supply in the market, some market insiders believe that the US mills may turn to pig iron to meet their raw material needs once the steel market recovers, creating a shortage of pig iron. This will not happen, however,  until steel demand significantly improves, which is unlikely to occur for at least several months.

The latest statistics show that total amount of pig iron imported into the US in the first quarter of 2009 was 864,503 mt, reflecting an increase of 50,209 mt when compared to last year’s figure in the corresponding period. However, since January 2009, import quantities have been declining and this trend is expected continue until steelmaking activity starts to rise again. The top pig iron import sources for the US during the first quarter were: Brazil, at 487,754 mt; Russia, at 219,777 mt; Ukraine, at 59,727 mt; South Africa, at 53,198 mt; and Sweden, 43,016 mt. The US also imported some tonnage of pig iron from Canada in Q1.