Russian producers offer pig iron at above $500 cfr

Russian merchant pig iron producers have increased offers to above $500 per tonne cfr southern Europe for basic steelmaking grades but buyers have so far resisted further increases.

 

Italian buyers have paid as much as $495 per tonne cfr for March shipments since the New Year and traders are doubtful they will be able to get further material at less than $500 per tonne cfr for late March and April shipments.

 

Transacted fob prices have risen $35-40 per tonne since late December into Europe to $455-470 per tonne for low-manganese material from $420-430 per tonne as Russian producers remain confident they will achieve increases as less material is available from Ukrainian suppliers restricted by a shortages of coking coal.

 

“Everyone is cautious and wondering if the pig iron price has reached its peak, Far East demand is lower around Chinese New Year and there are signs that scrap could be going down because rebar prices aren’t pushing up as much,” said a trader in western Europe. “But there are fewer pig iron producers in the market so they are in a stronger position to keep pushing through more increases,” he added.

 

Traders reported a fall of about $5 per tonne in freight rates from the Baltic Sea to Western Europe since the start of the year to $30-35 from $35-40 per tonne. Black Sea to Europe rates are about $35-40 per tonne.

 

Freight rates have dropped to a lesser extent than freight rates for scrap cargoes in the Atlantic because Russian ports are restricted in freezing conditions.

 

Traders expect freight rates to fall a further $5-10 in the next few weeks as the weather improves.