The on-going absence of US buyers in the global merchant pig iron market is starting to reflect on prices, and this is exacerbated by the softening in Chinese demand and price levels. 

Chinese demand is seasonally affected, but also reflects vast import volumes implemented in the last quarter. These have caused buyers to pull back and take stock while material continues to arrive during this traditionally quiet time.

But there is nothing traditional about the behaviour of the US market, which should be going through its high season. Instead, it is softening, with $20-30/gross ton declines expected for July domestic scrap deliveries. 

Pig iron import price expectations are much lower than sellers' offers, further pressured by rising freight rates. A Ukrainian mill negotiating with US buyers has lowered its offer indication from the general $340-350/tonne cfr USA level tabled by CIS mills in the last four weeks to around $330/t cfr. This nets back to $310-314/t fob Black Sea, depending on ports and volume.

A small lot of Ukrainian material also found its way to Italy, at $328/t cfr Maghera, netting back to $310-312/t fob Black Sea, after it was offered at $330-335/t cfr last week. Italy received three eastern Ukrainian pig iron cargoes in June, and mills are buying from ports, in addition to long-term direct contracts with Russian suppliers. 

The latter are relatively quiet, having sold out of large volumes previously. However, one equally small lot of extra grade material was sold to South Korea at around $350/t cfr by a major Russian supplier.

China booked three 60,000-tonne Brazilian high-phosphorous cargoes at $343-344/t cfr this week, netting back to $310/t fob, in line with bids for CIS material at $340-342/t cfr. Although slightly softer than a week prior, China remains in the market, willing to book CIS material despite long lead times, with small price concessions. September-loading material is practically gone, it appears, as some mills have cut August merchant pig iron availability either on higher slab/billet allocations, or due to blast furnace upgrades.

Pig iron market sentiment remains stable, with the technical correction in China necessary to absorb volumes and allow for longer lead times, observers note. US market troubles are seen as ongoing during this highly volatile period of forthcoming elections, pandemic, and general economic uncertainty. Several sources nevertheless note President Trump's "America First" attitude to the ferrous industry is a saving grace, without which losses would be deeper.