The rebound seen in the Turkish scrap market this week has provided some support for tradable prices for ex-Russia basic pig iron (BPI). But trading is still inactive with increasing logistical challenges as freight rates have already been heard at higher levels since fewer shipowners are eager to ship from Russian Black Sea ports due to the recent increase in war risks.
The tradable level for ex-Russia BPI in Turkey has been at $380-385/mt CFR. But while last week large mills in Turkey were all bidding at not above $370/mt CFR for decent volumes, early this week one of the Russian sellers managed to sell at $365/mt FOB or just slightly below, which translates to near $385/mt CFR, considering the usual freight rates.
The offer price level is stable at $370/mt FOB Black Sea, but this price has been heard only in some negotiations for small volumes in the Far East.
Despite some support coming from Turkey, the FOB price level is unsettled now as some companies have started to voice higher freight rates for the Black Sea. “We have heard $30-35/mt [versus $20-25/mt earlier] from some owners as they don't want to come to the Black Sea,” a market source said. According to commander of the unmanned systems forces of the Ukrainian army, Robert (Madyar) Brovdi, 126 Russian vessels were struck in the Azov Sea and 70 in the Black Sea during July 6-22. This is expected not only to increase freight but also insurance costs, though for now freight costs from Russian Black Sea ports have not settled. “We see most strikes on tankers, not cargo vessels for now in the Black Sea, but let's see,” another source said.
The SteelOrbis reference price for ex-Russia BPI has settled at $360-370/mt FOB, up by $10/mt from the lower end of the range over the past week.
