Ex-Russia basic pig iron prices (BPI) have posted a sharp fall this week, following the strong fall seen in scrap prices in Turkey. The overall outlook is also rather negative, with Russian sellers having limited sales allocation, though some of them have started to plan production cuts.
Import scrap prices in Turkey have plummeted by $23/mt on average to $312-325/mt CFR in the latest deals for different origins, according to SteelOrbis’ information. And since Turkey has been the main sales destination for Russian BPI, this has strongly impacted pig iron prices. Some buyers have voiced bids at $325/mt CFR, which translates to $305/mt FOB Black Sea. “I think the current level should be $300/mt FOB [for Russian BPI], but it is hard to find offers at such a low level at the moment,” a market source said.
Though prices have dropped, and this is obvious, Russian mills have been inactive in offering, with some of them planning to cut production. The offer prices have been heard at $310-315/mt FOB from some sellers. “Ural Steel will have to cut production, and Evraz will stop one of its blast furnaces in June. Therefore, I don’t think most mills will sell at $300/mt FOB. Everyone will wait for either a price increase or the depreciation of the ruble,” another trading source said. Some market sources believe that in the summer months the ruble will depreciate to $1 = RUB 90-100, versus $1 = RUB 81-83 in the past few weeks. But the impact of market prices, especially in Turkey, and of demand, is more important for pig iron sellers than the exchange rate, according to market sources.
Offers for Russian low-manganese pig iron of higher quality, for which the export allocation is limited, have been heard at $350/mt FOB Black Sea, with no demand reported.
In another sales destination for Russia - India - the tradable level has been heard at $340-345/mt CFR at the highest, translating to $300-305/mt FOB Black Sea.
The SteelOrbis reference price for ex-Russia BPI has settled at $305-315/mt FOB Black Sea this week, with the midpoint at $310/mt FOB, down by $17.5/mt on average since last week.