Prices for ex-Russia basic pig iron (BPI) have increased further this week, as already confirmed in sporadic deals, mainly done to Turkey. Even though scrap prices have been stable lately, and general sentiments in Turkey are not so bright, the rather limited allocation of cheap pig iron has pushed prices up and market sources are wondering how long this trend will continue.
The SteelOrbis reference price for ex-Russia BPI has settled at $340-360/mt FOB Black Sea, moving up by $10/mt on average over the past week. Most offers have been heard at the higher end of the range and up to $370/mt FOB. But the tradable level has been close to the lower end of the range. After sizable deals done at close to $340/mt FOB, as reported a week ago, some limited tonnages have changed hands at $340-345/mt FOB this week, which translates to $365/mt CFR or so. In addition, a small contract has been heard at $350/mt FOB (equivalent to $370-375/mt CFR), but this deal price has been assessed mostly as an exception.
“I do see some further increase in the market, but I would say the tradable level is at $350/mt FOB at the highest for now. Maybe next week we will see $360/mt FOB,” a market source said.
Nevertheless, there has been a limited number of factors supporting Russian pig iron exporters. The main one is the rather tight allocation of cheap pig iron for Turkey. One of the major Russian mills is out of the market after selling sizable tonnages to Asia in the past few months. The last deal was at $350/mt CFR. “They can give a really cheap price, but they are not available for Turkey now. They have no volumes,” a source said.
However, on the other hand, since buyers in Turkey were accepting price rises for Russian pig iron, the gap with scrap prices has narrowed a lot and is now in the range of $5-7/mt to zero in some cases as the latest deals for ex-US HMS have still been at $375/mt CFR in Turkey. “The trend [in the Russian pig iron market] is fully dependent on Turkey. If it continues to buy, the [pig iron] price will rise, but if it stops, the price rise for pig iron will also be terminated,” a trader commented.
