Prices for ex-Russia basic pig iron (BPI) have increased further during the past week, as confirmed in deals, but market sources believe that the current level could be a ceiling since there are no expectations for support from the scrap segment.
The SteelOrbis reference price for ex-Russia BPI has increased by $5/mt from last week to $335-345/mt FOB. A few sizable bookings for Russian material have been reported at $335-340/mt FOB Black Sea to Turkey and Egypt, resulting in the completion of sales of March shipment allocation from major mills. The price translates to around $360-365/mt CFR Turkey. Turkey has remained the main supporter of Russian BPI prices and small bookings of BPI from Donbass, the Ukrainian territory occupied by Russia, have also been heard at almost a similar price level to the sizable sales seen from Russia. A small purchase has also been heard at $345/mt FOB Black Sea, but this is rather an exception. “The $335/mt FOB price has been fixed in deals, but the market needs time to get used to $345/mt FOB. If freight softens to the traditional $20/mt for March shipments and beyond, it will be easier,” a market source said.
Despite the rather stable scrap market in Turkey, some steel mills have been interested in purchases of Russian BPI. “HBI prices are high now, so those who wanted to replenish stocks have agreed to higher pig iron prices,” a source in Turkey said.
New offers from major Russian mills have increased to $350/mt FOB Black Sea for April shipment, but most market sources believe that buyers will not accept this, especially as more deals are awaited for scrap in the near future.
In the HBI segment, there is still a lack of supply, especially after deals for ex-Libya HBI to Europe at $370/mt CFR. Some of the Libyan material sold to traders in the latest tender has also ended up in Egypt, besides Italy. So, for now, mainly Asian HBI offers are available in Turkey, and at higher prices. In particular, an offer for 50,000 mt of ex-Malaysia HBI has been heard at slightly below $380/mt CFR.
Apart from Russian BPI, offers for ex-Indonesia pig iron have been much more expensive - at $380-385/mt FOB. “India has a very good local market, so they can give tonnages for export only at prices far above $400/mt FOB,” a source said.
