The Black Sea basic pig iron (BPI) market has posted some further decline this week as the major buyers in the international market have been reluctant to accept mills’ previous offers and the outlook for scrap is weak, while the resumption of trading to Italy has confirmed the weakness of the market.
Two major Russian BPI sellers have decided to provide limited discounts to accelerate sales. In particular, there have been reports of a deal to Italy at $430/mt CFR, which translates to $405/mt FOB Black Sea, for a large volume. This level is $10/mt below the lowest offers heard since late last week to Italy. But the details regarding the contract have remained unclear by the time of publication. Previously, the tradable level in Europe was assessed at $425-450/mt CFR. Market sources still believe that for foundries the CFR level is still above $430/mt CFR, but, as no new deals have been heard so far, it is assessed at around $440-445/mt CFR.
In other major sales destination, Turkey, one small deal for not above 10,000 mt has been rumored at $405-410/mt FOB Black Sea, but it is reported to be a top-up cargo and not for a steel mill. “In Turkey, there is no interest in large-volume purchases of pig iron, especially when scrap is softening,” a trader said. Market sources believe that for Turkey the tradable level is $425/mt CFR at the highest, and only for small volumes, which translates to near $400/mt FOB.
There has been a tender for 30,000 mt of ex-India BPI, and, even though the information has remained unconfirmed by the time of publication, some market sources said it has gone to Bangladesh at $430/mt FOB. This price level is assessed as being extremely high and workable only for such countries as Bangladesh, while the target for other major markets for Indian producers should not be above $415-420/mt FOB.
Also, a small-volume deal of higher quality BPI has been reported from Russia to South Korea at $485/mt CFR, down by $5/mt from the previous sale of the same quality and volume last month.
The SteelOrbis reference price for ex-Black Sea BPI has been corrected down to $395-410/mt FOB, with the midpoint at $402.5/mt FOB, versus $395-415/mt FOB last week.
