The Russian pig iron market has remained dependent on sales to Turkey and the reference price has inched up a little, while another trend has been observed lately with the difference between basic and higher grades of pig iron prices on the rise, with the export allocation of the latter having increased. At the same time, European buyers have been assessing offers at higher levels for alternative origins after the quota for Russian pig iron was exhausted.
The SteelOrbis reference price for ex-Russia billet has settled at $335-360/mt FOB Black Sea with the midpoint at $447.5/mt FOB, inching up by $2.5/mt on average from last week.
In the Turkish market, the latest deal for 35,000 mt of basic pig iron from the sanctioned mill has been done at $355-360/mt CFR. This price is equivalent to $335-340/mt on FOB Black Sea basis. The higher allocation is explained by the earlier maintenance of the producer’s BOF than of its blast furnace this spring. Also, smaller volumes of basic pig iron from a non-sanctioned mill have been sold at $370-375/mt CFR, translating to $350-355/mt FOB Black Sea. The tradable level in Turkey for large volumes from non-sanctioned producers is assessed at $365-370/mt CFR at the moment. The lack of further increases in scrap prices in Turkey and the high availability of pig iron together with the limited geographical range of sales destinations for Russian pig iron have been behind the lower pig iron sales prices compared to the latest HMS scrap deals to Turkey.
Nevertheless, offers and very small trades for higher grade pig iron, low-manganese, semi-nodular and close to nodular grades, have been at much higher levels. For instance, a deal for a small volume of semi-nodular/nodular pig iron has been reported at $420/mt FOB. “I don’t believe that this price can be taken for assessing the real situation in the basic pig iron market,” one of the sources said. One more mill from Russia has been offering at not below $400/mt FOB for higher grades. “Tula is going to stop one of its blast furnaces and will start up a smaller one. So, their idea is to fully exit the basic pig iron market, focusing on steel like rebar,” a market source commented.
As for the European pig iron market, most offers heard for basic pig iron have been at $460-480/mt CFR for Ukrainian and Brazilian origins. Though these prices have been assessed as too high for most buyers, the tradable level has reached $450-460/mt CFR, versus $430/mt CFR two weeks back. “I think sales will be very slow as inventories of Russian pig iron [arrived to Europe] are huge. However, from June buyers will become more active,” a European trader said.