The falling scrap market in Turkey has impacted the mood in the Russian basic pig iron (BPI) segment. However, even though prices of pig iron have dropped indicatively, sellers are still resisting accepting excessively low bids.
The SteelOrbis reference price has settled at $345-360/mt FOB Black Sea, down by $12.5/mt on average over the past week. As most Russian suppliers have Turkey as their main buyer, they have been closely watching the scrap market, where deal prices for HMS I/II (80:20) have dropped to $368-373/mt CFR this week. In such conditions, the Turkish big buyers – the steel mills - have been voicing tradable levels for import BPI from Russia at $365-370/mt CFR at the highest, which translates to $345/mt FOB. “The price of imported scrap in Turkey has dropped more sharply than that of domestic scrap. Local buyers [small ones] calculate their price ideas by comparing pig iron to domestic scrap rates. So, while there is a decline, it certainly isn't down to $365/mt CFR. I’d say the workable price right now is $355-360/mt FOB [for small lots],” a trading source said. Also, another market source said that, for large volumes, the level $365/mt CFR could be right in the near future, but there have been no sales at such a low level for now.
Turkish sources said that there have been negotiations with Russian sellers at $380/mt CFR, which is closer to $360/mt FOB, but, after scrap fell below this level (an ex-US deal was done at $373/mt CFR), the market has been confused and unsettled.
