Prices for ex-Russia basic pig iron (BPI) have remained under strong pressure as buyers have been lowering their bids, seeing further drop in scrap prices. Trading activity has been minimal this week as sellers have been holding back from dropping prices to the levels, desired by buyers.
The SteelOrbis weekly reference price for ex-Russia BPI has been corrected down by $5/mt over the week to $380-400/mt FOB Black Sea. The higher end of the range reflects the major mills’ resistance to go below $400/mt FOB, while the lower end shows the tradable level for a number of large buyers.
Official offers from Russia have been limited and still at high levels of $410-415/mt FOB Black Sea, and the lowest possible for a major seller is $405/mt FOB for small volumes. But bids from steel mills in Europe and Turkey have been at $380-390/mt FOB at best. “I expect that Russia must drop the price to $370-380/mt FOB, if it wants to sell,” an international trader said. Another trader has estimated the current tradable level in Black Sea at $380-390/mt FOB.
Russian mills are not in a hurry to cut prices as they have good order books, while previous deals have been at much higher level and distributors in the importing markets still have a lot of unsold material. According to market sources, from mid-February to mid-March up to 150,000 mt of pig iron will arrive to Europe, making buyers cautious with new purchases. A few traders have said that the tradable level for Russian pig iron in Italy is $420/mt CFR, translating to $390/mt FOB, which is down by $10/mt from the previous sale to Italy. However, the major importing mill has claimed that the buyers’ idea is $410/mt CFR ($380/mt FOB) and even lower level is possible next week depending on the scrap price movement.
Also, a cargo of 25,000-30,000 mt of Ukrainian pig iron has arrived in Italy this week, but there have been no information at what price level it has been traded in February.
In Turkey, the BPI market has been silent with the latest shredded/bonus deal prices slipping below $400/mt CFR, and steel mills are not going to pay more for Russian pig iron. “For next sales prices [for foundries] we talk about a $20-30/mt decline,” a Turkish trader said.
