US pig iron imports poised for May rise

Market: Metals
29/04/20

US seaborne imports of pig iron and ferrous scrap appear set to rise in May as steel mills look to supplement thinning domestic supplies of prime scrap.

Eight vessels likely to be carrying pig iron are on the water and estimated to arrive in the US in May, according to an Argus analysis of vessel tracking data based on load port, destination and ship size. The cargoes total about 370,000 metric tons (t), which, if realized, would be the most imported in a month since January and up by about 40,000t from estimated April levels.

Four vessels are bound for Mobile, Alabama, with two originating from Brazil and one each from Russia and Ukraine. Three pig iron shipments are headed to New Orleans, with the remaining en route to Charleston, South Carolina.

Additionally, one likely bulk cargo of ferrous scrap is en route from the UK to Mobile. The 50,000t Gharapuri Island appeared to load at the Tyne dock, where recycler EMR operates, and is expected to arrive on 6 May.

No direct-reduced iron (DRI) shipments to the US are underway, following the suspension of operations at Nucor's DRI plant in Trinidad and Tobago earlier this month because of Covid-19-related government orders. Nucor also suspended production at its DRI plant in Louisiana for three weeks ending 25 April.

The uptick in imports comes at a time when US electric-arc furnace (EAF) steelmakers face an increasing shortage of prime scrap as a result of automotive and other manufacturing shutdowns that started in March in reaction to the spread of Covid-19. US auto plants are tentatively scheduled to resume operations at various times in May, but at lower-than-normal capacity.

Those shutdowns have also resulted in a sharp cutback in domestic steel mill capacity utilization, which has fallen below 60pc to the lowest since 2009. But integrated steelmakers have borne the brunt of that drop, with EAF-based flat-rolled operations, which use the most prime scrap and pig iron, maintaining higher operating rates.

Even with higher pig iron and scrap imports in May, prime scrap prices are widely expected to rise next month from April levels because of the supply crunch. Average US prices for prime #1 busheling scrap fell by $32/gross ton (gt) to $268/gt delivered mill nationally in April.

The incoming pig iron volumes were likely booked in March, when prices were ranged from $350-360/t cfr New Orleans. Spot prices have since dropped to $290-300/t as of last week.

By Blake Hurtik

US estimated pig iron and ferrous scrap imports, May 2020							t
Product	Vessel name	Tonnage	Origin	Load port	Sailed	Destination	ETA

Pig iron	Jaguar Max	40,000	Russia	Novorossiysk	Apr 8	Mobile	May 2
Pig iron	SBI Thalia	35,000	Brazil	Vitoria	Apr 15	Mobile	May 3
Pig iron	Thor Insuvi	30,000	Brazil	Itaqui	Apr 21	Mobile	May 3
Pig iron	HTC Delta	55,000	Russia	Novorossiysk	Apr 15	New Orleans	May 11
Pig iron	Protefs	40,000	Russia	Novorossiysk	Apr 23	New Orleans	May 18
Pig iron	Shanghai Bulker	55,000	Ukraine	Yuzhny	Apr 21	Mobile	May 19
Pig iron	Port Estrela	60,000	Ukraine	Odessa	Apr 29	Charleston	May 20
Pig iron	Grande Island	55,000	Ukraine	Yuzhny	Apr 25	New Orleans	May 24
Scrap	Gharapuri Island	50,000	UK	Tyne	Apr 14	Mobile	May 6
Source: Fleetmon, Argus

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US pig iron imports poised for May rise

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