CIS pig iron exports supported by demand from China

Spanish Market: Metals
21/07/20

China's buying interest was the key support to CIS exports of pig iron in the first half of this year, with the country receiving more than 16pc of combined overseas shipments from Russia and Ukraine over the period, up from just 2pc in the first half of 2019.

Chinese BPI import appetite surges

CIS merchant pig iron producers' exports reached around 3.76mn t in January–June, just 0.8pc lower than a year ago. And China took 613,000t of the total, a 9.1 times increase.

Appetite for pig iron from China — the only active and buoyant pig iron import market for the past few months — was supported by firm domestic steel production, which in January-June rose by 1.4pc from a year earlier to 499.01mn t, data from the country's National bureau of statistics (NBS) show, keeping China on track to produce 1bn t of steel this year despite the impact of the Covid-19 pandemic.

Of the other major importers of CIS BPI, US steel output slipped by 17.9pc year on year to 40.63mn t in January–June, with an average production capacity utilisation rate at around 68pc, data from American Iron and Steel Institute (AISI) show. Turkey's January–May steel production of 13.49mn t was 5.6pc down on the year, and Italy's five-month output was 26.9pc lower year on year at 7.65mn t, according to Worldsteel.

"China entered the lockdown measures against the Covid-19 outbreak first, got out of them first and seems to be recovering from their consequences most rapidly, feeding its relatively strong steel output with imported pig iron, while others are still struggling at least to maintain production," one trader said.

As a result, Russian shipments of pig iron to China totalled 304,000t in January–June, almost 4.5 times more than a year before, accounting for 15.1pc of the total compared with just 3pc in the first half of 2019, Russian rail data show. And Ukrainian deliveries reached 309,000t over the period, or 20.6pc of the total, the country's custom service said. In January–June 2019, Ukraine did not export pig iron to China at all.

These data do not reflect transactions concluded in the recent few months, as most of them have been scheduled for later delivery amid limited availability of material. Chinese buyers booked in the spot market at least 540,000t of Russian and Ukrainian pig iron during May-mid-July, of which around 110,000t was planned for July shipment, 300,000t for August and 150,000t for September.

US spot bookings of CIS-origin pig iron were around 250,000t over the same period amid continued weak buying interest and volatility in the domestic ferrous scrap market.

Covid hits overall CIS pig iron shipments

Overall pig iron exports from Russia totalled 2.01mn t in the first six months of this year, down by 12pc on a year earlier, undermined by weaker demand from Italy and the US — the key outlets for Russian exporters — comprising 23.7pc and 31.8pc of Russia's total exports — as both countries were severely impacted by the pandemic (see table). But shipments noticeably improved from a 30.6pc drop in the first quarter.

Russia produced 26.1mn t of pig iron in January–June, up by 2.2pc on the year, deteriorating from a 2.6pc increase mostly due to a weaker domestic steel output, which was 3.5pc lower on the year at 28.5mn t in the six-month period, the country's statistics service Rosstat's data show.

Ukraine's January–June pig iron exports of 1.5mn t were 22.8pc up on the year, with the US remaining the largest recipient, taking 56pc of the total, followed by China and Turkey, which accounted for 20.6pc and 7.7pc shares, respectively. Ukrainian pig iron output, in contrast to Russia, declined in January–June by 2.6pc on the year to 10.2mn t, according to state-controlled metals association Ukrmetallurgprom.

The rise in exports was broadly attributed to the fact that Ukrainian pig iron exporters were more willing to accept lower prices from Chinese buyers in the first quarter and continued to sell volumes to China thereafter. Steelmakers Metinvest and ArcelorMittal Kryvyi Rih (AMKR) have been Ukraine's key pig iron exporters.

Turkey was the only traditional buyers of CIS BPI to consume more pig iron from the region in the first half of this year. Turkey imported 115,800t from Ukraine, 11.2pc up on the year, 447,500t from Russia, almost a 100pc rise, and 242,765t from Ukraine's breakaway Donetsk region, down by 19.7pc.

The Donetsk region is incorporated into Russia's rail transport data as shipments from Russian rail stations near the Russian/Ukraine border, including Uspenskaya, Gukovo, Bataisk and Zarechnaya, are not used by any Russian pig iron producer. Shipments were made from these stations to the Novorossiysk-Exportnaya and Zarechnaya-Exportnaya stations, which are used for handling exports routed through the southern ports of Novorossiysk and Rostov, respectively.

Pig iron from Donetsk usually trades at prices $10-40/t lower than Russian and Ukrainian producers can achieve, dampening official export figures from two countries. But this year, Donetsk-located mills experienced interruptions in raw material supply and various production problems, which resulted in lower exports from the region and, consequently, higher exports from Ukraine and Russia to Turkey, market participants said.

Narrowed spreads between CIS pig iron export prices and Turkish ferrous scrap import prices, especially at the beginning of this year and in early April — the most Covid-19-impacted month in the global ferrous context — fed stronger interest for pig iron from Turkish buyers (see graph).

China maintains purchasing appetite

Since early March, after Italy, the US and other smaller buyers such as Germany, Spain, South Korea and Poland one by one stepped back from the market owing to lockdowns, Chinese buyers took advantage of being the only active BPI customer and pressured for lower prices from CIS suppliers.

But a gradual uptick in raw material prices, which started in early April and turned into a sharp rise in early July on shorter supply from Brazil, led not only to a subsequent increase in pig iron prices, but also boosted physical purchases of pig iron as substitute to expensive iron ore.

This implanted some confidence into sellers, which already played the limited availability card to support prices, and cautioned them against price reductions to meet softer bids from the US.

CIS sales to China registered last week were heard done at $353–354/t cfr, while a deal to the US was concluded at $330/t cfr, conforming to the highest bids from US buyers. Even given freight rate difference and special conditions in the US deal, the difference in the fob equivalents can be estimated at $5-8/t.

But market participants anticipate that global BPI prices, including for CIS material, will be likely to slide in the third quarter on traders' expectation that actual physical availability from the CIS and Brazil is higher than producers have claimed, stabilising-to-lowering iron ore prices and slowing demand from other outlets outside China.

By Valery Zavyazkin

Russian pig iron exports			t
	1H20	1H19	±% 1H20/19

Total	2,012,761	2,286,487	-12.0
including
US	477,045	695,164	-31.4
including by
NLMK	374,347	n.a.	n.a.
Tulachermet	102,698	627,998	-83.6
Italy	639,598	847,414	-24.5
including by
Ural Steel (Metalloinvest)	638,015	846,855	-24.7
Kosaya Gora plant	1,583	—	n.a.
Evraz	—	559	n.a.
Turkey	447,489	224,584	99.6
including by
NLMK	357,622	120,433	196.9
Kosaya Gora plant	46,836	—	n.a.
Tulachermet	43,028	89,691	-52.0
Evraz	—	14,460	n.a.
China	303,991	68,159	346.0
including by
Tulachermet	166,047	—	n.a.
Evraz	137,944	68,159	201.4
— Russian rail data

Argus CIS pig iron export and Turkey ferrous scrap import prices $/t

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31/03/25

EU stainless safeguards, metal plan meet mixed reaction

London, 31 March (Argus) — Europe's stainless steel industry has had a mixed reaction to the European Commission's safeguard steel review and its action plan to protect the bloc's metals industry, both announced on 11 March. Steelmakers have welcomed greater commitment from policy makers to support the sector, but are still concerned at a lack of concrete commitment to significant protectionist measures, while traders, service centres and scrap suppliers are worried the most radical proposals could severely damage their businesses. The European Commission's review of definitive safeguard measures on imports of certain steel products identified no new import pressure for stainless cold rolled sheets and strips, and left tariff rate quotas for the next 15 months virtually unchanged even as carryovers and unused quota access were removed. And the commission's European Steel and Metals Action Plan included proposals to curb imports of finished steel and exports of scrap alongside the extension of the Carbon Border Adjustment Mechanism (CBAM) to potentially include raw material exports and downstream products. European stainless steel flat producers — battling weak medium-term demand and a high cost structure — expressed disappointment on the absence of protectionism in the safeguard review through to July 2026, but told Argus they were encouraged by proposals in the Action Plan that acknowledge the need to to curb imports for domestic industry's long term health. "The industry remains threatened by global excess capacities and by global distortions from China and other countries that artificially support their domestic industries or circumvent the current measures," Finnish producer Outokumpu told Argus . "These challenges need to be mitigated with more assertive solutions, including replacing current safeguards with more effective measures from July 2026." European trading groups surveyed by Argus welcomed the stability offered by the unchanged import quotas as the industry navigates other pressures — such as high energy prices and US tariffs — but said they expect lobbying by producers to drive a wave of new measures in the fourth quarter of this year, with stainless steel-specific safeguards likely to be implemented from next year. "Current quotas will only last this year, if you ask me," a trader said. "We expect new regulation to be announced in September/October." A key area of focus for the industry is the possible introduction of the melt-and-pour clause, which determines the origin of goods by the location at which the metal is originally melted, and disregards third countries where further processing may take place for circumvention of anti-dumping duties. The EU stopped short of immediately implementing this clause as part of the Action Plan, and will conduct further assessment of the action. But market participants expect [consultation](https://direct.argusmedia.com/newsandanalysis/article/2670486] on the policy will start after the current safeguard period ends. Several large European stainless steel producers are heard to be importing slab from Asia, and traders told Argus they were relieved that melt and pour is not coming into play this year. A Spanish trader said the clause will level the playing field for European producers, but a hasty implementation this year would have simply added to costs for both producers and consumers in the near term. Outokumpu said it welcomes the melt-and-pour proposals as part of a wider anti-circumvention drive that it said is required in Europe. The EU's Action Plan also calls for the need to address carbon leakage of exported steel through a potential extension of the CBAM to include exports. Trading groups told Argus this will be difficult to implement across the spectrum of trading partners, and may render exports uncompetitive to the detriment of European service centre groups. Outokumpu called upon the need to leverage the EU's competitive advantage by including Scope 2 emissions within any CBAM regulation for downstream products. "It is critical to prevent European steel producers from being placed at a disadvantage from imports with higher emissions from energy usage," the group said. "Outokumpu uses low-carbon energy across its operations with a high-recycling rate, so a fair benchmark definition is necessary to ensure that our low-emission production receives the competitive advantage it deserves." The EU's action plan also proposes the potential introduction of export duties for all steel scrap in order to limit scrap leakage from the bloc. Stainless steel scrap traders surveyed by Argus said there was no chance such a move would ever be implemented as Europe simply cannot consume all the scrap it produces, and that recyclers use exports to keep prices at a level that encourages further investment. "We would drown in scrap if exports fell," a trader said. "Prices would decrease sharply and work like a subsidiary for an antique industry. High-end recycling plants need high prices to process complex materials which would end up in landfill otherwise. No investments would be made if prices are pushed into the ground." Trade bodies BIR and EuRIC suggested a more rational move could be to introduce mandatory recycled content targets for metals products that incentivises domestic demand and usage for scrap, while also allowing scrap to move freely to export markets. By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US consumer confidence down on policy angst

28/03/25

US consumer confidence down on policy angst

Houston, 28 March (Argus) — The University of Michigan's gauge of consumer sentiment fell in March to the lowest level since November 2022, led by a slump in expectations over the "potential for pain" from US economic policies introduced by the new administration. Sentiment fell to 57, down from 64.7 in February and 79.4 in March 2024, according to the University of Michigan's consumer sentiment survey released Friday. The final reading for March was lower than the preliminary reading. The sentiment index fell to a record low of 50 in June 2022 on inflation concerns. The index of consumer expectations fell to 52.6, the lowest since July 2022, from 64 in February and 77.4 in March last year. The expectations index has lost more than 30pc since November last year. "Consumers continue to worry about the potential for pain amid ongoing economic policy developments," the survey director Joanne Hsu said. The decline "reflects a clear consensus across all demographic and political affiliations: Republicans joined independents and Democrats in expressing worsening expectations … for their personal finances, business conditions, unemployment and inflation," Hsu said. Current economic conditions slipped to 63.8 in March from 65.7 in February and 82.5 last March. Two thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. Year-ahead inflation expectations jumped to 5pc this month, the highest reading since November 2022, from 4.3pc last month. The University of Michigan survey comes three days after The Conference Board's preliminary Consumer Expectations Index fell in March to its lowest in 12 years, to below a threshold that "usually signals" a recession. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK steel importers oppose other countries' caps

28/03/25

UK steel importers oppose other countries' caps

London, 28 March (Argus) — Steel importers in the UK suggest the imposition of a cap on any other countries' quotas could effectively stop trade, given the small volume of the quotas. In a recent submission to the Trade Remedies Authority, UK Steel said 15pc caps should be introduced on other countries quotas for hot-dip galvanised, plate and rebar. But in its submission to the TRA, trading firm Salzgitter Mannesmann argues that any cap based on a percentage of the quota "will ultimately most likely remove rather than reduce imports as shipments from many third countries, notably the far east, require a certain base volume to ship economically to the UK". Other trading firms and service centres told Argus they share the same view. Salzgitter Mannesmann also suggested a new country quotas for individual importers be added to the safeguard based on their imports over the past two or three years. The only local producer of hot-dip galvanised coil, Tata Steel, would be likely to argue against this as volumes from some countries, notably Vietnam, have increased dramatically in recent years. Salzgitter Mannesmann also suggests Tata Steel cannot produce hot-rolled coil over 1.85m wide, for which the UK has to totally rely on imports. Traders have for some time argued that there should be no import constraints on material, such as 2m wide, as there can be no injury to the producer on grades it cannot produce. Service centre Sebden Steel said the current measures make it "impossible" for the UK to be flooded with cheap foreign imports, and that people are "misinformed by mainstream media and UK Steel". "The UK producer is in a safe place already and any additional measures will only serve to cause injury to independent steel service centres, independent steel stockholders and the UK manufacturing base, which will all be faced with a further tightening of the supply chain and increased costs," it said. Importers, unsurprisingly, question why Tata Steel, now a re-roller until its electric arc furnaces are installed, can import on much more favourable terms than others. Tata has a much bigger quota than the rest of the market, at around 2.3mn t, but the main problem for importers is that the company has fewer constraints on where it can source, with only a 40pc cap on any given country within that quota. Independent service centres, which all compete with Tata Distribution, can only import much smaller quantities from different locations, given the fragmented composition of quotas; the other countries quota for 1A, for example, is less than 100,000 t/yr. EU mills have far and away the largest quota to sell 1A HRC into the UK, but given their higher costs compared with Asian producers, they struggle to compete; Tata's imports come from all over the world, as well as some from its sister mill in IJmuiden, the Netherlands. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's Aurelia Metals to boost Cu, Zn processing

28/03/25

Australia's Aurelia Metals to boost Cu, Zn processing

Perth, 28 March (Argus) — Australian metal producer Aurelia Metals is set to triple mixed metal ore processing capacity of ore from its Federation mine, after authorities in New South Wales state approved a project consent change. Aurelia produces mixed metal ore at its 600,000 t/yr Federation mine. It then hauls ore to its nearby Peak processing centre to produce a range of base and precious metals, including zinc, copper, lead, and gold. The company has been allowed to move only 200,000 t/yr of ore between its two NSW sites since Federation opened in mid-2024, because of consent restrictions. But the latest change allows it to move 600,000 t/yr of ore to Peak, the company announced on 28 March. Aurelia's updated consent comes as it continues to ramp up production at Federation. The company only processed 16,500t of Federation ore in October-December 2024, recovering 55t of copper, 626t of lead, 1,263t of zinc, and 502oz of gold. Aurelia is increasing its base metal production capacity, despite other Australian producers doing the opposite. Australian metal firm IGO paused its Forrestania nickel project in July-September 2024, and will close its Nova copper and nickel mine in 2027. But this phenomenon is not unique to Australia. Global metal producer Glencore cut its total copper output by 6pc in 2024, following planned production declines in Chile and Peru, and unplanned disruptions in the Democratic Republic of Congo. Copper prices have been quite volatile over the last year. The London Metal Exchange's (LME) copper cash price stood at $8,696/t on 27 March 2024, before bouncing between a high of $10,857/t and a low of $8,620/t over the next 12 months. LME's copper price stood at $9,787/t on 27 March. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Recent deep-sea and short-sea cfr Turkey scrap deals

27/03/25

Recent deep-sea and short-sea cfr Turkey scrap deals

London, 27 March (Argus) — A summary of the most recent deep-sea and short-sea cfr Turkey ferrous scrap deals seen by Argus. Ferrous scrap deep-sea trades (average composition price, cfr Turkey) Date Volume, t Price, $ Shipment Buyer Seller Composition Index relevant 21-Mar 40,000 383 (80:20) April Izmir USA HMS 1/2 85:15, shred, bonus Y 18-Mar 30,000 376 (80:20) April Iskenderun Cont. Europe HMS 1/2 80:20, shred, bonus Y 18-Mar 40,000 381 (80:20) April Iskenderun USA HMS 1/2 80:20, shred, bonus Y 18-Mar 40,000 380 (80:20) April Marmara Baltics/Scan HMS 1/2 80:20, shred, bonus Y 17-Mar 30,000 375 (80:20) April Iskenderun Cont. Europe HMS 1/2 80:20, shred, bonus Y 14-Mar 30,000 380 (80:20) April Marmara USA HMS 1/2 80:20, shred, bonus Y 13-Mar 30,000 382 (80:20) April Iskenderun USA HMS 1/2 95:5, shred Y 13-Mar 30,000 380 (80:20) April Izmir USA HMS 1/2 80:20, shred Y 13-Mar 30,000 375 (80:20) April Izmir Cont. Europe/UK HMS 1/2 80:20, shred Y 13-Mar 30,000 380 (80:20) March Iskenderun USA HMS 1/2 80:20, shred Y Ferrous scrap short-sea trades (average composition price, cif Marmara) Date Volume, t Price, $ Shipment Buyer Seller Composition Index relevant 24-Mar 3,000 353 April Izmir Romania HMS 1/2 80:20 Y 24-Mar 3,000 351 April Bartin Romania HMS 1/2 80:20 Y 21-Mar 5,000 370 April Izmir Greece HMS 1/2 80:20 Y 21-Mar 6,000 369 April Marmara Italy HMS 1/2 80:20, bonus Y Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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