CIS merchant pig iron prices are again heading lower on the back of an excess of supply, sluggish demand and strong pressure from buyers.
Platts weekly pig iron price assessment slipped $3/mt to $170/mt FOB Black Sea on Friday.
Merchant pig iron, which traditionally follows ferrous scrap prices quite closely, has seen more of split from scrap in the last few weeks.
Scrap prices for shipments to Turkey bottomed out in the second half of October, climbing $30/mt to peak at $201/mt CFR Turkey in November, and subsequently inched down but have not returned to previous lows.
Pig iron, in contrast, is so heavily oversupplied that it picked up insignificantly compared with scrap and may fall further, sources said.
Ukrainian merchant pig iron exporter Metinvest expects the price pressure persisted, a source said.
It managed to close some sales of December production above the $190/mt CFR Turkey level, the source said.
It is, however, impossible to hold onto this price for the company's remaining December and January output as Turkish buyers are pushing for $185/mt CFR, the source added.
A trader heard of a sale from Metinvest at $184/mt CFR Turkey in the spot market, but the mill declined to confirm it when contacted by Platts.
"The activity in the market is high, we are getting a lot of inquiries, but there are no deals because we cannot accept those prices," the source at Metinvest said.
In addition, buyers in the US were seeking $185/mt CFR New Orleans, a level even more difficult to achieve due to the higher freight cost compared with Turkey.
In Italy, CIS pig iron offers were officially at $210-215/mt CIF Italian ports, but transactions were finalized at an even $195/mt CIF, sources said.
The low demand for pig iron has prompted some mills to cut their monthly allocation, but it has not had a positive effect on prices yet, sources said.
DMZ planned to produce a total of 49,000 mt of pig iron in December with one blast furnace in operation, sources said.
The company's second blast furnace remains idle due to insufficient demand.
Metinvest was also reducing its monthly pig iron production, it told Platts.
Russian producer NLMK also told Platts it was considering idling the oldest and smallest of the five operational blast furnaces at its Lipetsk works due to unfavorable market conditions.
