Last week a new jump in CIS prices indicated that the global market remained strong on the back of Chinese demand. Pig iron and billet prices from the Black Sea, for example, increased signigicantly after two weeks of stability.

CIS pig iron export prices gained on strong Chinese demand and rising feedstock prices amid shrinking availability. Only one mill sold a lot for January loading, closing December production availability, with others' loading dates penned for various dates in February.

As was expected, the tightening restrictions on output on environmental grounds have sent Chinese import markets into a new round of purchasing, pushing prices as high as $405/tonne cfr, and the trend is on-going, sources say. The pace of the increase is yet again posing urgent procurement dilemmas to the US and European buyers, some of whom are active in negotiations, but only few so far have conceded to pay the price, it seems.

This tactic may backfire, traders note, as pig iron availability is shrinking rapidly. One trader tells: "There is no pig iron. What is available now is a very long lead time looking at transatlantic sales."

With January production volumes bookings in full swing and demand growing in all major importing regions alongside the growth for finished products prices, the US is likely to be booking some volumes imminently, if it does not want to remain without feedstock, several sources note. Some sources put bids from the US buyers at $375-380/t cfr, but offers are not likely to be below $400-405/t cfr, traders say. A recent surge in the US flat products prices would be driving demand, but the current weaker than expected domestic scrap price dynamic is clouding the prospects somewhat, they add.

Turkish demand is also expected to continue, amidst still rising hot rolled coil prices, which in domestic market are pushing fast towards $600/t ex-works, sources say. Italian buyers are in the market for volumes and offers are in line with Turkish levels at $390-400/t cfr, according to sources.