The Russian basic pig iron (BPI) export market has remained quiet, but prices have declined due to the downtrend seen in the scrap segment and low demand from Turkey.
The SteelOrbis reference price for ex-Russia BPI has lost $5/mt over the past week, coming to $370-375/mt FOB Black Sea, but, under the current conditions, even this price has been assessed as high by buyers, while it has been partially supported by rather limited supply.
Turkish buyers have been seeing some offers at $395-397/mt CFR, but, since scrap prices have already fallen below the $390/mt CFR mark in some contracts this week, the buyers’ price idea for Russian BPI will hardly be above $385/mt CFR next week.
Since the leading Russian mill is implementing some production reductions, it is not in a hurry to offer such low prices, at least for now. But market sources agree that the demand problem may be much bigger compared to supply limitations. “Prices are going down under the pressure from the lack of demand. Melt and Pour is a dangerous measure for Russian suppliers [of BPI as Turkish steel mills may consider reducing purchases from Russia in order to be able to export their products to Europe], but it has not happened, so it is not a factor in the downtrend factor for now,” a market source said.
For high-quality pig iron which is consumed by foundries, there has also been limited supply and prices in deals for July shipment have slipped by $5/mt to $415-420/mt FOB. “There is a shortage of high-quality pig iron now. But, Tula and some other producers of pig iron may also enter the high-quality pig iron segment if steel mills [in Turkey] reduce their purchases of Russian pig iron,” another source said.
