Having lost a majority of major global customers due to sanctions, Russian basic pig iron (BPI) producers have continued to seek alternative buyers. However, even having found buyers ready to accept the potential risks, Russian suppliers have to offer much more attractive prices compared to the market levels in order to encourage buyers to sign a contract.
Accordingly, lately Russian BPI suppliers have been focused on doing business with Chinese buyers. In particular, late last week a Russia-based steel mill Severstal reportedly sold a 50,000 mt cargo to China at $560/mt CFR. Afterwards, ex-Russia BPI offers have been voiced at $530-535/mt CFR. In late April, both ex-Russia BPI and BPI produced by Donetsk Metallurgical Plant which is located on territory temporarily occupied by Russia was reportedly offered at $650/mt FOB. “The Chinese market is dropping now, and certainly such numbers are attractive as they are much lower compared to global prices,” a Chinese source stated. “With a pervading weak market, such low-priced sales are causing even more disturbance. That does not even cover our production costs,” an official at an Indian BPI mill commented. As SteelOrbis reported earlier, the latest ex-India export BPI quotations were heard at $740-750/mt FOB last week. Meanwhile, Brazilian BPI producers have continued to target $900/mt FOB levels in coming transactions when offering material for August shipment.