This week prices for ex-Russia basic pig iron (BPI) have increased slightly, but only a few deals have been reported at higher levels to Turkey and North Africa. Considering the poor sales and very high port stocks, the situation for Russia’s BPI exports is still viewed as being “very bad”.
A higher-priced deal for ex-Russia BPI has been heard for 20,000 mt to Egypt, done at $360/mt CFR over the past week, as confirmed by market sources. This price theoretically translates to around $330/mt FOB or slightly below, but market sources reported "some special conditions and the real price at close to $315-320/mt FOB". Market sources agree that this CFR price is on the higher side, but considering very rare deals to Egypt and the lack of a strong need for merchant pig iron in the country, market sources are not expecting deals to this destination in the coming months and consider the above deal more as an exception.
The Turkish market has been rather slow, and buyers have been voicing bids at $310-315/mt FOB. A few small-volume sales have been heard at this level to Turkey, slightly higher than the previous contracts at $310/mt FOB to Turkey, also for small volumes. The new deals are translating to $330-340/mt CFR. However, considering generally slow demand and very high stocks at Novorossiysk port, some mills have decided to transport pig iron by railway to other ports - to the Far East or the Baltic Sea. “They [mills usually shipping from Black Sea] send pig iron to the Far East, where their netback is slightly better. But the market situation is simply catastrophic, especially given the exchange rate of the ruble,” a market source said.
In the high-grade pig iron segment (material with high-manganese and high-sulphur content), around 10,000 mt from Russia has been traded at $398/mt FOB this week, almost stable from two weeks ago. This material can be used as semi-nodular, and its price difference with basic pig iron has increased in the past few months due to the limited allocation of high-grade material.
The SteelOrbis reference price for ex-Russia BPI has increased by $5/mt on average over the past week to $305-320/mt FOB Black Sea, with the midpoint at $312.5/mt FOB.