PRICING NOTICE: Proposal to amend specifications of south Brazil, Baltic Sea export, Italy import pig iron price assessments

Fastmarkets proposes a realignment of the specifications for its south Brazil, Baltic Sea export and Italy import pig iron price assessments, based on market observations.

For the south Brazil export pig iron assessment, Fastmarkets proposes to change the payment terms from payment on-delivery to partial prepayment upon readiness.

For the Commonwealth of Independent States fob Baltic Sea pig-iron export assessment, Fastmarkets proposes to specify the maximum cargo volume for exported pig iron in this region at 20,000 tonnes, whereas there is currently no maximum cargo size.

Cargoes of up to 20,000 tonnes are frequently shipped from the Baltic Sea to foundries in western and northern Europe, while more rarely cargoes above 50,000 tonnes have been shipped to the United States - mainly to steelmakers - at significantly lower prices per tonne.

Fastmarkets also proposes to expand the chemical composition specification of the Italy pig-iron import price assessment to include phosphorous content.

High-phosphorous pig iron, which is shipped from the south of Brazil, commands a lower price than low-phosphorus pig iron due to its quality and lower demand in the global market.

In 2018, Italy imported 1.7 million tonnes of pig iron, according to the International Steel Statistics Bureau (ISSB). Russia and Ukraine, who supply low-phosphorus pig iron, together supplied 1.44 million tonnes and held 85% of the Italian pig iron import market.

Brazil shipped only 144,000 tonnes, ISSB reported, which makes up 7% of Italian pig iron market, Fastmarkets estimates. Yet only part of these tonnages included basic pig iron because Italy imports foundry and nodular pig iron as well, market sources said.

Additionally, Fastmarkets is proposing that the incoterm of the Italy import pig iron price assessment should change from cif to cfr to match the majority of cargoes in the market.

Current specification:
Assessment: Brazil exports pig iron $ per tonne fob Vitória/Rio Brazil
Phosphorus: More than 0.1%
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: Spot
Unit: USD/tonne
Payment terms: Payment upon delivery
Publication: Weekly. Friday, 2-3 pm London time

Proposed specification:
Assessment: Brazil exports pig iron $ per tonne fob Vitória/Rio Brazil
Phosphorous: More than 0.1%
Quantity: 20,000-70,000 tonnes
Location: fob Brazil
Timing: Spot
Unit: USD/tonne
Payment terms: Partial prepayments upon readiness
Publication: Weekly. Friday, 2-3 pm London time

Current specification:
Assessment: CIS pig iron exports $/tonne fob Baltic Sea
Dimensions: 10-15kg
Manganese: <0.09%
Quantity: Minimum 5,000 tonnes
Location: fob Baltic Sea
Timing: 4-6 weeks
Unit: USD/tonne
Payment terms: Payment upon delivery
Publication: Weekly. Thursday, by 3pm London time

Proposed specification:
Assessment: CIS pig iron exports $/tonne fob Baltic Sea
Dimensions: 10-15kg
Manganese: <0.09%
Quantity: 5,000-20,000 tonnes
Location: fob Baltic Sea
Timing: 4-6 weeks
Unit: USD/tonne
Payment terms: Payment upon delivery
Publication: Weekly. Thursday, by 3pm London time

Current specification:
Assessment: EU pig iron imports $ per tonne cif Italy
Dimensions: 10-15kg
Manganese: >0.1%
Quantity: Minimum 5,000 tonnes
Location: cif Italy
Timing: 4-8 weeks
Unit: USD/tonne
Payment terms: Against FCR or B/L
Publication: Weekly. Thursday, by 3pm London time

Proposed specification:
Assessment: EU pig iron imports $ per tonne cfr Italy
Dimensions: 10-15kg
Manganese: >0.1%
Phosphorous: Less than or equal to 0.1%
Quantity: Minimum 5,000 tonnes
Location: cfr Italy
Timing: 4-8 weeks
Unit: USD/tonne
Payment terms: Against FCR or B/L
Publication: Weekly. Thursday, by 3pm London time

The consultation period for these proposed amendments will end one month from the date of this pricing notice on Monday June 10, with changes taking place, subject to market feedback, from Tuesday June 11.

To provide feedback on the amendments outlined above, or if you would like to provide price information by becoming a data submitter to Fastmarkets’ global pig iron price assessments, please contact Marina Shulga by email at: pricing@fastmarkets.com. Please add the subject heading FAO: Marina Shulga, re: global pig iron prices.

To see all Fastmarkets’ pricing methodology and specification documents go to www.metalbulletin.com/prices/pricing-methodology

Marina Shulga

marina.shulga@fastmarkets.com

Ross Yeo

ross.yeo@fastmarkets.com

Published

Marina Shulga

Ross Yeo

May 13, 2019

11:30 GMT

London