The recent increase in scrap prices in Turkey, as well as the improved demand for scrap and possible support for pig iron imports following changes in Turkey’s inward processing regime, are expected to push up ex-Russia BPI (basic pig iron) prices slightly in the near future.
The tradable level for imported BPI in Turkey has been assessed at $335/mt CFR, translating to around $315/mt on FOB Black Sea basis. Market sources have not reported new deals at this level, but most of them expect this level will be confirmed in sales in the near future. “The recent increase in scrap in Turkey is a consequence of Erdogan’s law under which steel mills have to use at least 25 percent of local semi-furnished products in the production of finished steel. That is why scrap is rising because of its higher usage in steel production in Turkey,” a trading source said, adding that, the following increase in scrap, pig iron prices may increase by $5-10/mt in new deals.
Also, with the recent implementation of the safeguard duty for import billet at 16.2 percent in Egypt, demand for pig iron from this country may also improve gradually. “I do not see big support for prices, but at least as regards demand there should be an additional cargo required per month,” other sources guessed.
The SteelOrbis reference price for ex-Russia BPI has been increased by $5-10/mt over the past week to $305-315/mt FOB Black Sea.
At the same time, the investigation of a cargo of pig iron of “unknown” origin which arrived in Italy is underway. This material is said to be Indian in the documentation, shipped from Lebanon. But, in fact, market sources suspect it is Russian BPI, which has been illegally shipped to Europe where Russian material has been banned since the quota finished in March. “This was not a full cargo of 45,000 mt, so I believe a trader decided to change the documents and to take a risk,” a source said. Also, some market participants believe it is ex-Donbass pig iron, but the origin of the material has not been finally confirmed by the time of publication. There is also no common opinion regarding the price of BPI in this cargo, with some saying it is around $360/mt CFR. “This should cause a big problem for both traders and producers when the investigation finishes,” SteelOrbis heard from a European source.
