Offer prices for ex-Russia basic pig iron (BPI) have been on the higher side by the end of December, but trading has been still weak and overall market sources are not very hopeful for January-February as major buyers will insist on stable prices, having sufficient stocks of not only raw materials, but also cheap semis options.
Most offers from large mills have been heard at $325-330/mt FOB, versus $310-320/mt FOB in the middle of the month. But “there were zero deals, as sellers don’t want to give discounts, while buyers are hesitant to purchase, seeing large volumes available in the market,” a source commented. The highest tradable level has been heard at $320/mt FOB for the Turkish market, which translates to $345-350/mt CFR on CFR basis. Market sources said that over the past few months, buyers target pig iron prices by over $20/mt lower than benchmark HMS scrap.
Rare deals for higher grade pig iron have been heard as done at $370/mt FOB Black Sea, but “this should be a peak for now,” a source said. According to the market, this material was mainly for Far East foundries.
As for the expectations, there is not much optimism even though prices will be stable by the mid-January due to holidays in Russia. “This year has been very bad for all Russian mills. Although there's little hope for next year, the main pressure will remain from China with its cheap billets,” a trading source said.
The SteelOrbis reference price for ex-Russia BPI has added $10/mt over fortnight to $310-330/mt FOB Black Sea.
