24/06/14 – Black Sea pig iron prices dip on bearish iron ore/scrap markets, Ukraine unrest

Black and Azov sea pig iron prices have taken a slight dip on the back of the bearish sentiment in the iron ore and scrap markets and the risks created by the unsettled situation eastern Ukraine, market watchers said Friday.Subsequently, Platts lowered its weekly pig iron price assessment $2.50 to $375/mt FOB Black Sea on Friday.Sources based in Ukraine noted that the hostilities in the eastern part of the country are not calming down and the mood of unpredictability and adversity was still prevalent despite the recent presidential elections.

“Things are unlikely to improve much in the nearest future,” a local trader said.Ukrainian pig iron producer Donetsksteel said buyers “fear to work with Ukraine” due to the existing risks.

Still, there is no indication customers have started to cancel orders or shied away from booking, the mill source said.Prices have come under more pressure as some buyers expected a discount to offset additional risks. This factor, alongside the iron ore and scrap weakness, resulted in a small price decrease of “no more than $5/mt,” the mill source said. The sales were concluded at average level of $374/mt FOB, mostly with buyers in the Mediterranean as the US lost some attractiveness.One trader, having ordered some cargo more than two weeks ago at $377/mt FOB Azov Sea, preferred to wait on the next orders until the situation stabilizes. A small volume was also bought by another trader who paid $375/mt FOB to the Ukrainian producer.Donetsksteel’s monthly availability for July-August was heard to be at the usual level of 110,000 mt. The mill was booked until mid-August and was going to wait until mid-July before selling the remainder of August and September.

Other Ukrainian producer Metinvest also had normal volumes to offer, equal to up to 90,000 mt/month. A mill source saw slower activity in Turkey, while the buyers in Italy were willing to pay $400-402/mt CIF Italy, slightly less than three weeks ago, the mill said. The bids received from the US were around $408-409/mt CIF, a few dollars below sales from Brazilian suppliers concluded at $411-412/mt CIF US, the mill added.

Source – Platts.com