The Russian pig iron export market is facing weak demand from major consuming markets, compounded by Russian mills' urgency to sell their cargoes, thereby pressuring prices, market participants inform Kallanish.

Russia's recent suspension of export duties on pig iron until 31 December – expected to save Russian mills up to $20-25/tonne – has not significantly helped due to the pricing downtrend.

In India, trading activity is subdued due to the Diwali holiday. India recently purchased two cargoes from Russia at $370-375/t cfr. One source opines that India is negotiating another deal in the same price range.

Italian customers are struggling with weak demand for finished steel amid financial and economic constraints, exacerbated by EU sanctions on Russian iron. Based on indications from India, Italian customers were considering prices of $370-380/t cfr Italy; however, these figures are purely nominal as the EU’s 2024 quota for Russian pig iron was exhausted last month. One source nevertheless notes that “Italy [buyers] quoted at around $400/t cfr [for Russian material] with various schemes and machinations.”

One trading source says their company’s lawyers are advising against handling Russian material by bringing it to the port for storage until the new quota opens from 2 January. “This situation differs from safeguard duties, where EU customers can keep material in the port, waiting for the new quota period or withdrawing it from customs clearance,” the source notes. “There is also a lack of clarity around whether Italian authorities might challenge the legality of holding sanctioned material at the port, making it risky to bring material with a December arrival,” the same source adds.

“The Russians are quite under pressure with prices, but they also have the advantage of the cancellation of export duty,” another EU-based trading source says. Demand in Italy and the EU remains weak, and 2025 does not look promising, he adds.

“The downturn has already lasted nearly two years, with demand declining even more sharply in recent months – a trend that’s proving to be one of the longest and most intense slowdowns seen in my career,” he notes. “We are also experiencing the first insurance cuts and we are starting to see more and more customers with payment difficulties,” another source adds.

In Turkey, demand remains weak, with falling scrap prices leading customers to indicate interest at a maximum of $365-370/t cfr for bulk volumes, as scrap is reported available at $355-360/t cfr for prompt shipment. Notably, increased demand for slab and raw materials in Turkey, driven by Turkish sales to the EU, excludes Russian-origin procurement due to EU sanctions. This resulted in Turkey registering only 19,813 tonnes of Russian-origin pig iron imports in August.

As for Russian mills, Ural Steel was heard looking for $365/t fob Black Sea or slightly less to start negotiations, with room for discounts. Tula Steel was heard pricing at $365/t fob or slightly less, despite historically quoting at least $10/t above Ural Steel’s price. These are both for loading readiness by mid-to-late December. In the case of Asia sales, prices could be at around $355/t fob to start negotiations, sources note.

A trading source in Turkey reports that pig iron from Donbas is available at $355/t fob, adding that this material is typically traded with more significant discounts on Russian origin.