The mood in the ex-Russia basic pig iron (BPI) market has become more pessimistic this week, following the sharp price drop in scrap deals in Turkey. Most major buyers of pig iron in Turkey and Europe have withdrawn from the market or have cut price ideas significantly, and so suppliers have been inactive, not willing to drop prices right now.
The SteelOrbis reference price for ex-Russia BPI stands at $385-405/mt FOB Black Sea, with the midpoint at $395/mt FOB, down by $7.5/mt over the past week. The higher end of the range represents the highest achievable level for major suppliers, but only for small volumes and not for steel mills, according to sources. The lower end of the range reflects the falling bids from steel mills in Europe, while in Turkey buyers’ price ideas are even lower.
The previous booking of Russia BPI to Europe was for an Italian steel mill at $430/mt CFR, translating to near $400/mt FOB. But with the current developments in scrap, buyers will target around $15/mt for the next round of purchases. “If scrap is down $15/mt, it is logical to expect the same for pig iron,” a European source said. The highest possible price for foundries and small-volume sales to Europe, except Italy, is assessed at $430-435/mt CFR, down by $10/mt from the reference price last week. The offer price level from Russia is assessed at $405-415/mt FOB, which translates to $435-445/mt CFR Europe.
In Turkey, the market is fully at a standstill this week with no new bids been seen. “The Turks will stay away [from purchases] and wait until scrap stops falling. I do not expect any new pig iron sales before the stabilization in scrap,” a trader said. The previous deal done by a Russian mill to a Turkish trader was at $405-410/mt FOB Black Sea done earlier in February, translating to $425-435/mt CFR. Since scrap prices have fallen below $400/mt CFR, steel mills in Turkey will target $380/mt FOB and below for new purchases.
No negotiations have been reported from Russia to Asia amid low bids and problems with transportation by railway.
