Having continued to face serious challenges searching for buyers due to Western sanctions, Russian suppliers of basic pig iron (BPI) have remained highly aggressive in negotiations with Turkish customers, who appear to remain almost the only customers potentially interested in any kind of cooperation. Having booked earlier low-priced ex-Russia slabs apart from BPI, some Turkish steelmakers have opted to take a break from new bookings, thereby exerting even more pressure on prices. Accordingly, by the end of the current week, suppliers based in Ukraine’s Donbass region, which is temporarily occupied by Russia, reduced their offers by around $30/mt compared to those levels voiced in late October.
In particular, by the end of the current week offers for BPI produced by Donetsk Metallurgical Plant (DMZ) to Turkey have come to $370/mt CFR, down from $385/mt CFR at the beginning of the week and down $30/mt from the end of October. According to SteelOrbis’ information, the company has in its hands at least 20,000 mt of material. “Given the geopolitical crisis and the complete uncertainty with regard to their future, they [DMZ] appear to have decided to sell everything possible just to get cash, no matter at what price,” an international trader stated. “The Turkish market will be badly affected by these terrible prices,” another global trader commented. The price on FOB basis has been voiced at $330/mt FOB.
Meanwhile, Russian BPI producer, NLMK has been seeking to get $420-430/mt CFR Turkey, which is obviously unattractive for Turkish customers.