Iron trade remains hot despite absence of US and China

Global iron seller sentiment continued to strengthen over the past week, with new sales ending at higher levels amid increased demand. .

One buyer from Italy, influenced by rapidly declining port stocks and low availability of spot supplies in the CIS, accepted higher bids and ordered a large Brazilian shipment at $540/t FOB Brazil. The cost and freight of a 35,000 ton consignment to be loaded at the end of March/beginning of April is estimated at about $585-595/t cfr Maghera.

The sell-off resulted in new offers from Brazilian sellers at prices up to US$540-550/t fob, with some suppliers up to US$560/t later this week. It also interrupted several other talks with European buyers, which traders said were trading at $530-535/t fob. Italian buyers, most of whom are still bidding at a top price of $580/tonne francs, may have run out of options due to a lack of other offers, and sales are expected to continue this week at a new higher level, they add.

Turkey also ordered a large shipment of 50,000 tons of Brazilian pig iron for April loading at $520/t fob, with freight also estimated at around $50/t, which translates to $570/t in Turkish terms. This is much lower than offers of smaller lots from CIS producers and stockists at $580-590/t cfr. No other direct sales to Turkey were heard last week, but according to participants, the trader booked around 20,000t with a Ukrainian producer at $550-555/t FOB Black Sea for Turkey or Italy.

There was talk that the trader was buying about 30,000 tons from the breakaway Donetsk Republic's Donetsk Iron and Steel Works at $550-555/t fob, but this was never confirmed before the deadline.

These sales continued to feed the optimism of the sellers, some offers have already entered the market at a price of at least $580/t fob, although in general quotes from the CIS and Brazil are now extremely scarce. One Ukrainian supplier is not on the market, covering only long-term contracts, and due to the fact that Russian suppliers of pig iron do not offer, demand significantly exceeds supply. This is confirmed by the fact that European factories are increasingly considering the possibility of using commercial raw materials for their own purposes, traders confirm.

The sell-off of cargo shipped in April prompted Brazilian exporters to quote higher bids ranging from US$520 to US$540 per tonne fob depending on the region. The iron trader simultaneously quoted a Brazilian price of $550/tonne fob for subsequent sales.

US buyers remain passive in seeking iron spot cargo as sentiment is dampened by falling domestic scrap settlement prices (see Kallanish passim), but they are making soft requests, one CIS supplier confirms. He adds that he does not have the ability to send even one shipment to the US. Traders estimate Nola's cfr prices at $550-560/t cfr, which is still too low for CIS or Brazilian suppliers and apparently too high for US buyers.

In Asia, the interest of Chinese traders rose to about $560-570/t, which is also too low for the CIS countries and Brazil to be taken seriously. Interest from Japan and Taiwan was higher, $590-600/t cfr for traditionally smaller and faster cargoes, but there were no sales. Traders note that there is still no Indian material amid the recovery of the domestic market.