The outlook for pig iron exports from the Commonwealth of Independent States has been hurt by continued weakness in iron ore pricing, bearish scrap sentiment and Ramadan-related slowdown in Turkish demand, local sources said Friday.
Platts on Friday reduced its weekly Black Sea pig iron assessment by $2.5/mt to $377.5/mt FOB Black Sea.
Traders reported limited buying activity on their side due to lack of interesting offers or difficulties with financing. Metinvest was reported by one trader to be asking $380/mt FOB Black Sea, which was viewed as too high. The trader added that a discount was unlikely as the mill was "not so keen" to sell to traders, and instead preferred to work directly with pig iron consumers.
Some buyers were also tied up by the difficulty in obtaining financing for pre-payment as banks remained negative towards Ukraine due to the ongoing political instability, sources said.
Donetsksteel was reported to have sold its July allocation of 110,000 mt to Mediterranean markets at prices in the range of $373-377/mt FOB Azov Sea, with pre-payment, a source at the mill said. So far the company has not opened its order books for August but acknowledged that sentiment was weak due to the iron ore corrections and expected lower demand from Turkey due to Ramadan.
Metinvest said demand from the main markets including Italy and Turkey remained stable but pressure on prices has increased. The mill reported sales to Italy at $405/mt CIF and was quoting $407/mt CIF for the US market. Turkish buyers indicated $390/mt CIF but the mill would reject such low bids, looking for something closer to $400/mt CIF, the company source said.
