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Kallanish Steel Weekly: Pig iron remains under pressure from scrap (March 12, 2024)

Issue 10, 2024 - This week's editorial: Pig iron remains under pressure from scrap

Russian pig iron export prices remained under pressure due to falling scrap prices, leading to subdued demand as foreign customers wait for prices to bottom out.

In certain markets, notably Italy, where pig iron market saturation levels are relatively high, further price reductions may not spur buying. This is because end-customers purchasing from distributors in Italy would demand discounts, complicating the distribution process for material acquired at higher prices compared to current levels.

This situation may lead, in turn, to some Italian distributors providing bids to Russian mills at much below current price levels, to offset potential losses by averaging the cost of stocks.

In Italy, around 30,000 tonnes of Ukraine-origin cargo began offloading at port from 5 March, reportedly purchased by the largest Italian end-user. Market participants assessed the price of the ArcelorMittal Ukraine cargo at $430/t cfr Italy, down from the previous week’s estimate of $440-450/t cfr. This is based on alternative sales to the USA and tradable levels there at the time when the transaction presumably happened.

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