Prices for ex-Russia basic pig iron (BPI) have continued to move down over the past week amid the ongoing imbalance between demand and supply, the decline in bids in some major sales destinations and the lack of support from the scrap market at least for now.
The SteelOrbis reference price for ex-Russia BPI has been settled at $305-330/mt FOB Black Sea with the midpoint at $317.5/mt FOB, moving down by $12.5/mt on average over the past week from $320-340/mt FOB.
The higher end of the range - $325-330/mt FOB - corresponds to the recent offers seen by some sellers, the tradable level in Europe and some negotiations in Turkey. “Most producers want at least $330/mt FOB, but buyers are not ready to pay above $320/mt FOB,” a trading source said.
In Europe, large buyers have been evaluating the workable price levels for Russian BPI at $355-360/mt CFR, corresponding to around $325-330/mt FOB for sizable lots, versus $360-370/mt CFR a week ago. “The market is really bad in Italy and Europe. Scrap is not going up here, local purchase prices are down between five and eight euro,” a European source said. In the European secondary market, current prices are much higher - at above $400/mt, but since at the moment the quota for Russian BPI is finished and, according to sources, at least 200,000 mt of Russian material have already come to European ports or are on water, the price assessments for pig iron for next year’s quota are lower.
In the Turkish market, an offer for low-manganese BPI has been heard at $340/mt FOB, but the buyers will target at least $10/mt lower, according to market sources. Moreover, “Scrap is up in Turkey, but we don’t see an improvement for pig iron,” a trading source said, evaluating the current tradable level at $320/mt FOB.
The lowest price levels for Russian material are still seen in India’s import market. After a sale of a cargo from the traditional seller to this destination at $355/mt CFR over a week ago, which translated to around $310-315/mt on FOB Black Sea basis, another deal was rumoured at $345/mt CFR. The price is equivalent to $305/mt FOB Black Sea and it has been assessed as being on the lower side by market sources. One of the mills has denied the deal, but a few traders said that the low-priced offer has been circulated in the market for lower quality pig iron.