Ex-Russia BPI prices have posted a strong rise of up to $20/mt this week mainly on the back of strong support from the situation in Turkey, where scrap and local steel prices have increased significantly. The price increase has been fixed in some deals, also as buyers had not seen very cheap offers available from Donbass earlier in March.
A deal for 40,000 mt of Russian BPI has been signed at $380/mt CFR for May shipment to Turkey this week. This price translates to $355/mt FOB Black Sea after the recent increase in freight rates. At the moment, freight from the northern Black Sea shore to Turkey has been assessed by market sources at $23-27/mt depending on the volume. One of the Russian sellers said that freight rates are at least $5/mt higher now, which limits the rises of FOB prices. However, market sources believe that this deal was signed before the significant hike happened in the scrap market. “With such scrap prices, $390/mt CFR for Russian pig is more than acceptable,” a Turkish source said.
Though prices have increased significantly, there has been no panic-buying in Turkey, with many customers evaluating the situation as scrap is coming closer to $400/mt CFR for HMS I/II. There have been few options as offers for HBI are also going up. Ex-Libya HBI was available at $380-385/mt CFR in the Mediterranean early this week, up by $15/mt over the previous two weeks. But by the end of this week, sources say that $390/mt may be sellers’ next target. In mid-March, a small cargo of ex-Russia HBI was sold to Turkey at $354/mt CFR, but for now indications for ex-Russia HBI are above $360/mt CFR.
The major Russian BPI mills are going to target $360-365/mt FOB Black Sea for basic pig iron or even higher in the next round of sales, while the cheapest option may be Donbass, from where the price is estimated by market sources at $350-355/mt FOB. As SteelOrbis reported earlier in March, ex-Donbass pig iron was sold at $337/mt FOB at the time.
High-quality pig iron from Russia was sold at $415/mt FOB Black Sea this week due to the shortage seen for specific grades. Another Russian mill, which can produce such high-quality material, is targeting $420/mt FOB and above.
The SteelOrbis reference price for ex-Russia BPI has increased to $350-365/mt FOB Black Sea with the midpoint at $357.5/mt FOB, which is $16.5/mt higher than $337-345/mt FOB in the previous two weeks.
