The USA pig iron import prices rose this week as supply in the Black Sea evaporated after Russia's invasion of Ukraine and alternative sources and materials were called into question.
Market participants were unable to stabilize prices this week, and forecast values are increasing day by day in the absence of tight trading. Offers started around $600/ton cfr in New Orleans last week, but have climbed as high as $750/ton according to some market participants. Prices at this level will be the highest in price history going back to 2016 and will surpass the $672/t cfr high reached by New Orleans in June 2021.
The Russian-Ukrainian conflict has drastically cut off the supply of pig iron in the Black Sea, stranding some ships that have not yet sailed, and hindering new sales. Ukraine's pig iron production was halted due to the Russian occupation and port operations were suspended.
Although Russian pig iron producers are active, lack of financing has prevented new supply from reaching the market amid the threat of possible bank sanctions from the country.
Russia and Ukraine supply 60 percent of US pig iron imports, while consumers turn to Brazil to get the abundance, but find minimal relief due to the lack of additional capacity.
Prices from Brazil have been further complicated by the market this week, with many popping up to celebrate Carnival.
US steelmakers will rely on pig iron inventories that look healthy for the next 30-45 days, and future supply will be further questioned. He estimates that US ports received 551,500 tons of pig iron in January and 470,000 tons in February. This figure is an average of 487,000 tons per month in 2021. Ship tracking data showed an estimated 260,000 tons of pig iron in transit to US ports on arrival in March, with 90,000 tons from Russia and 70,000 tons from Ukraine.
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