The price trend in the ex-Black Sea billet basic pig iron (BPI) market has remained bearish as lower-priced deals, to India specifically, have been posted, and price ideas in the European market have softened further over the past two weeks, as SteelOrbis has learned from the market.
A deal for 30,000 mt of ex-Donbass BPI was done last week to India at $395-400/mt CFR, translating to $342-347/mt FOB Black Sea, while the previous bookings to India were at $407-413/mt CFR. There has been information that the winning offer was made by a Chinese trader and that payment could be done in the Chinese currency. Moreover, this week, another tender for the same volume has been opened in India and, though it has not been closed yet, according to market sources, the lowest offer from the same Donbass-based mill has been reported at $390/mt CFR or $335-340/mt FOB Black Sea this week.
In addition, ex-Donbass BPI has been available to Turkey at $370/mt CFR or so, translating to around $340/mt FOB Black Sea, down from offers at $360/mt FOB two weeks ago and last week’s offers at $350/mt FOB Black Sea. Moreover, taking into account the recent weakening of the Russian ruble, lower BPI prices are possible from Russian and Donbass-based mills. “Scrap in the Russian Federation has not yet increased, and pig iron exports, when converted into rubles, should give a good opportunity in terms of price. You can earn on this difference,” a Russia-based source said. “It is easy to get $340/mt FOB and I think the price will be even lower. Due to the ruble’s weakening, clients are pressing suppliers more and more,” a trader said. According to Bloomberg, the Russian ruble has lost 7.3 percent from early last week on June 26, coming to $1 = RUB 90.666 on July 5. Also, some sources believe that $340/mt FOB is already too high and that bids will come close to $320/mt FOB Black Sea soon for ex-Donbass BPI.
In addition, the tradable levels in Europe are still softening and the tradable level for large volumes from Russia will be not above $385-390/mt CFR in the next round of sales, which translates to $340-345/mt FOB Black Sea. For smaller volumes, up to $400/mt CFR or slightly above is still possible, sources believe. Two weeks ago, a few deals for ex-Russia BPI were done at $400-420/mt CFR.
Some activity has been reported in the Far East market as well. For instance, a contract for 10,000 mt of ex-Russia BPI has been signed at $365-370/mt FOB Black Sea, being assessed as a relatively high price for the current market conditions.
As a result, the SteelOrbis weekly reference price for ex-Black Sea BPI has been lowered from $350-370/mt FOB two weeks ago to $335-360/mt FOB, given the tradable prices in most sales destinations and recent deals.
