The mood in the Black Sea basic pig iron (BPI) market has worsened this week, given the still sluggish demand in major sales destinations, the high offers of some Russian mills - which prevent any volume movements, and the reduced scrap prices in Turkey.
The SteelOrbis reference price for ex-Black Sea BPI has come down to $340-360/mt FOB, with a midpoint at $350/mt FOB, down by $5/mt on average over the past week.
The lower end of the range corresponds to the tradable level from mills in Donbass in Ukraine, which is under Russian occupation at present. “With the current negative trend, the previous $355-365/mt FOB prices are too expensive. The workable level for Donbass [BPI] is $340-345/mt FOB maximum now,” a trader said. Moreover, some traders believe that it will be possible to obtain $330/mt FOB soon, with firm bids.
This FOB price translates to $360-370/mt CFR Turkey. “After scrap slipped below $350/mt CFR, we are not interested in this level [for BPI],” a Turkish source said.
In Europe, trading has also been limited and the workable level for BPI from Russia has remained at $380-390/mt CFR depending on the buyer with the freight assessed at around $30/mt from the Black Sea to Italy. “I don’t know how the market can move if mills [from Russia] give offers at $400/mt, $390/mt or $380/mt FOB, it doesn’t matter,” a trader said.
One Russian mill, which has limited allocation and offers higher quality pig iron, has been officially offering low-manganese pig iron at as high as $430/mt FOB Black Sea. “I heard that semi-nodular pig iron changed hands at $415/mt FOB, which is also high,” another source said.
Demand from India has slowed down, following declines in the local rebar market, and the tradable level is now said to be at $395/mt CFR at the highest, translating to $345/mt FOB.