Pig iron prices in Black Sea ports fell by 3.7% in July

Pig iron prices in Black Sea ports for the period from July 5 to August 2, 2024, decreased by 3.7% – to $395-405/t FOB. In July, raw material prices were mostly stable, and the main adjustments took place at the end of the month.

In early July, the Black Sea pig iron market remained largely stable as demand from Turkey was reduced, and Italian consumers were also inactive. The lull in the market is caused by a slowdown in steel sales and low prices for finished products. In general, July-August is a quiet period as consumption declines amid summer vacations and adverse weather conditions for steel demand.

Market participants expected the return of Turkish consumers after the holiday break in late June to support pig iron sales in early July. At the same time, activity remained limited, with most of Italy’s steel mills in summer mode, which means plants will operate at reduced capacity or perform maintenance until at least early September.

«This summer, Italian steelmakers anticipate long maintenance shutdowns. Market sentiment continues to be negative due to lower sales of all steel products and scrap. The revival of the market can be expected only in the second half of August,» the trader noted.

Basically, Russian-made products are offered on the Black Sea pig iron market, and if Turkish consumers do not have restrictions on the import of the relevant raw materials, then there are sanctions restrictions on the EU market. The quota for the supply of these products to the EU is about 95,000 tons per month. Ukrainian manufacturers are also present in this market, but the volume of supplies is limited due to lower competitiveness compared to the products of the Russian Federation and problems with internal energy supply.

In late July, Black Sea pig iron prices began to decline amid weak demand, which continues to put pressure on prices.

Another pressure factor is the suspension of export duties of the Russian Federation until August, which created an oversupply in the market of Black Sea iron. In addition, Turkey has seen a large volume of orders for semi-finished steel from China and Asia, which has already affected the demand for scrap, and may soon reduce the consumption of pig iron.

Pig iron prices in Brazil decreased by 0.6% in July– to $442.50 (FOB Southeastern ports). The Brazilian market was marked by stability in July against the background of weak demand from the USA and Mexico.

Market participants expect this situation to last until the end of the summer, but in September, purchases will intensify and prices will likely rise. However, the increase will not exceed $5-10/t.

The global production of pig iron in January-June 2024 decreased by 1.8% compared to the same period in 2023 – to 704.01 million tons. In particular, 642.4 million tons of pig iron were produced by the blast furnace method, and 642.4 million tons of pig iron were produced by the direct recovery method – 61.64 million tons.