Italian pig iron prices have remained steady since the start of the month, Kallanish understands.

Opinions among market participants vary when it comes to demand. According to a producer in the CIS, there is strong demand from both steel mills and foundries, despite complaints about the performance of finished product. Another trader notes buyers are offering lower prices, and activity has been quiet over the past few days.

Distributors who purchase directly from Russian producers allowed to sell in Europe are closing deals at $440-460/tonne cfr from Russia and Ukraine. A steel mill who buys large tonnages from Russia is said to be targeting below $440/t cfr after buying at $450/t cfr.

Steelmakers are buying small tonnages of material in consignment at the port of Marghera at the equivalent of $450-460/t cfr. Italian scrap prices have deflated in June, widening the gap with pig iron. On average, Italian scrap is at about €360/t ($385) delivered.

Local foundries association Assofond has expressed concern over pig iron supply. This has eased since the shortage experienced in 2022. Buyers are sourcing material from unsanctioned Russian producers, South Africa, and some from Brazil and Norway. From next year, there will however be a decrease in supply from Russia due to new sanctions.

“It is crucial to explore alternative channels for sourcing pig iron, considering that a significant portion of our supply, 70%, currently relies on Russia," Assofond president Fabio Zanardi said earlier this week (see Kallanish passim).

On an international scale, the Black Sea pig iron market is currently experiencing a period of low activity as Turkey was observing Eid holidays this week. “Turkey is on vacation and Italy is unchanged – it’s a bit quiet this week,” a trader noted. “Large quantities can only be available from Ural Steel or Evraz. I think even Evraz has not much quantity now. There is no shortage but also not many cheap suppliers.”

One sanctioned Russian producer was offering at $430/t fob Black Sea, or about $450-455/t cfr Turkey. That producer’s basic pig iron typically has a premium of roughly $20/t over market value.