Brazil caught up with the CIS on iron prices

The merchant pig iron market was calm last week amid continuing reshuffle in fundamentals, but stronger sentiment last week pushed Brazilian suppliers to higher prices and higher US sales.

Despite the fact that demand in the US remains sluggish, regular weekly sales continue to take place, which contributes to the increase in inventories of steel mills. The regularity of Brazilian deals with the United States over the past six weeks has allowed manufacturers to significantly extend delivery times to February, catching up with the booming trading dynamics of early 2021.

A shipment of 30,000 tonnes of pig iron from northern Brazil was sold in the US early last week for $ 570 per tonne nol, up $ 20 over the previous week and more in line with CIS pig iron sales two weeks earlier. The cost of cargo on a fob basis is estimated at about USD 530-540 per tonne, which is confirmed by the harmonization of the situation in the freight transport market, in which many routes are experiencing lower rates and less volatility. This is due to the elimination of bottlenecks in Chinese ports over the past two months and an overall decline in shipments worldwide, traders say.

There were no sales or negotiations with CIS suppliers in the United States, except for long-term formula-based contracts with Russian and Ukrainian suppliers. The latter are not offered to the United States due to lower than previously planned production volumes associated with the continuing shortage of coking coal and coke at the country's factories. Offers from Russian suppliers from USD 550 per ton fob are still too high for the US market and reach 600 USD per ton fob. Nola. This is even with the softer freight rates, which are around $ 50 per tonne for the usual large volumes.

Meanwhile, the Italian market remains relatively calm, but expectations for continued stable demand are high. Prices in the port market are around $ 600 per tonne, while larger imports are quoted at $ 580-590 per tonne and supply is limited. Italian distributors are expected to return to the market for large lots in December, before the holidays kick in at the end of the month, traders expect.

Turkey did not book any volumes last week as it focuses on the scrap trade for January and has ordered enough supplies over the past six weeks. Indian material is still offered, but at prices higher than in the CIS countries, buyers largely ignore it. According to traders, materials from the CIS countries can be ordered at a price of $ 570 per tonne, while Indian pig iron is priced at $ 580-585 per tonne, and with a longer delivery time.

The continued easing of sentiment in Asia has not resulted in interregional sales as China still does not participate in imports.