The situation in the ex-Black Sea basic pig iron (BPI) market has started to improve this week, following active scrap sales at higher prices. As a result, BPI exporters have also been more bullish, though many market sources have remained skeptical how big price increases can be accepted by buyers and for how long this trend will last, SteelOrbis has learned from the market on August 18.
There has been a rumor about a deal done by a Russian mill, who is offering a bit lower quality material, at $370/mt CFR for at least 30,000 mt to Italy, but most market sources said that if it was done last week, this price is too high and the same mill was in the market at $350-360/mt CFR with no success. However, this week, the market is at $370/mt CFR for lower grades, and up to $380/mt CFR for the traditional sellers. “It seems that the slight fever in scrap gave boost to BPI and the temperature has increased, but for now only among the producers. When Italy will fully come back from vacation, the temperature can normalize and maybe $380/mt CFR or above will be accepted, but I abstain from optimism for now,” a trader said. In addition, the prices have been supported by rising freight costs, for instance, the freight for large cargo from Black Sea to Italy has increased to at least $30/mt from $25/mt on average just early in the week. As a result, the 380/mt CFR price translates to $350/mt FOB Black Sea now.
Offers from Russian major mills to European distributors have been at $390-405/mt CFR, moving mainly sideways from the previous week.
Activity has been higher in the Asian market as well. A lot of 30,000 mt from an ex-Russia non-sanctioned mill has been reported to be sold to India at the level of $346/mt FOB, according to sources. The CFR price has been assessed at around $383-386/mt CFR. “In India, [local] prices have soared, availability of scrap is an issue. So, there is interest in imports,” a local Indian source said. “I believe import prices in India may reach $400/mt CFR soon, but mainly due to rising freights,” one of suppliers said.
Moreover, in the Far East, despite still no major fundamental improvements in China, Taiwanese and South Korean buyers have been in the market with also up to $350/mt FOB Black Sea is accepted.
Availability of ex-Donbass BPI from mills has remained limited and no new firm offers have been voiced. Some demand for import BPI is expected to come from Turkey, but no new negotiations have been heard as for now. “There are more inquiries in the market from everywhere. But price ideas are still at low levels,” an international trader said.
The reference price for ex-Black Sea BPI has been settled at $335-350/mt FOB this week, up by $15/mt from the lower end and $10/mt from the upper end over the week.
