The European Commission (EU) is considering a new 12th package of sanctions against Russia over its war in Ukraine, which may include a ban on pig iron imports, according to Bloombern and Politico reports, citing sources familiar with the matter. The news, even though there has been no official document published or press conference held, has shaken the Russian pig iron market, though it has failed to prevent European buyers from carrying out negotiations with Russian suppliers.
The proposed 12th package of sanctions is also aiming to ban Russian diamonds, and other products like copper, aluminum wire, foil and pipes, while tightening other measures, such as the oil price cap. In the reports, it was mentioned that the ban will be for “pig iron grades” without specifying them.
“None of us knows more than what is said in the newspapers,” a pig iron seller commented. A few other market sources said that they do not expect the final decision will be made earlier than the end of this year, but also added that this [the ban] is very possible. “If [this initiative] it happens, there will a lot of Brazil pig iron supply in Europe. And some share Ukraine will get, with Canada and South Africa,” a trader said.
The SteelOrbis reference price for ex-Black Sea basic pig iron has settled at $355-365/mt FOB this week, up slightly from $350-365/mt FOB last week. Despite the talk about the possible ban of Russian BPI in Europe, around 40,000 mt of ex-Russia material have been traded at around $390/mt CFR to Italy, which translates to around $360/mt FOB, $5/mt higher than bids heard last week. European customers are still considering buying from Russia due to the cheaper price compared to other major suppliers. In particular, ex-Brazil offers have been at $425/mt FOB, while the ex-Ukraine BPI price is assessed at not below $420/mt FOB, with availability still limited.
No new deals for ex-Black Sea BPI have been reported to Turkey lately after 10,000 mt sold at $380/mt FOB earlier, but for low-manganese material, which is not included in the SteelOrbis reference price.
Europe is one of the critical destinations for Russian BPI exporters. In the January-October period, the total pig iron volumes transported by rail to ports for further export totaled 2.9 million mt, up 11 percent over the same period last year.
As reported earlier, the ban on Russian billets imports into the EU will be effective from April 1, 2024, while that for slabs will be effective from October 1, 2024. Russian mills are lobbying for the continuation of the grace period by three years, with no progress for now, according to market participants.
