Prices for ex-Black Sea basic pig iron (BPI) have increased since last week and market sources have linked this with the announcement of the export tax in Russia at seven percent at the current exchange rate. However, in fact, prices have increased insufficiently to cover the cost of the new duty for mills, leaving the very high price targets of sellers without attention, SteelOrbis has learned from the market.
Since last week, one of the major mills from the unrecognized territories of Donbass, temporarily occupied by Russia, has resumed offers of BPI to the export market after almost two months of outage. The latest deal for 10,000 mt of this material has been reported as having been closed at slightly above $360/mt FOB Black Sea, and, though market sources are not sure about the final sales destination, it is said to be Turkey. The price is assessed by some sources as being a little high for the current market, but the sale has been confirmed as done by a number of sources.
In Europe, the situation is not supportive of ex-Russia suppliers. The highest tradable levels have been assessed at $355-360/mt FOB, translating to $385-395/mt CFR, but trading has been at a standstill as, on one hand, buyers have not been ready to pay higher so easily: the last sales were at $370-380/mt CFR around two weeks back. And on the other hand, most mills have been targeting much higher levels, at $380-400/mt FOB, to cover losses due to the new tax, much higher than the current tradable levels.
In India, where import BPI bids have been among the highest recently in the international market, there has been a rumor about a sale of 30,000-40,000 mt of ex-Russia BPI at $370/mt FOB, translating to around $420/mt CFR. However, this could not be confirmed by the time of publication, and most major traders said that bids some time ago touched $360-365/mt FOB and then slipped back, making the information about a contract at $370/mt FOB doubtful. “I believe that $370/mt FOB is a very good price, and that, in reality, it was lower. As long as there is no demand from the Chinese [importers], the market can’t start to rise. Scrap is unmoved, so Turkey by themselves will not pull up prices much,” a trader said.
The SteelOrbis reference price for ex-Black Sea BPI has been settled at $350-365/mt FOB with the midpoint at $357.5/mt FOB, up by $10/mt over the past week. Most market sources have explained this by some rare sales and tradable levels in Europe and India, but the targeted levels of mills have already been voiced at $390-400/mt FOB Black Sea.