Prices for basic pig iron (BPI) from Russia have kept going down over the past week as the weak Turkish scrap market and falling bids from the main buyers have been exerting pressure. Also, some mills have dropped prices for pig iron for non-EU markets, depressing the already bearish market situation.
In the Turkish market, a deal for pig iron has been rumored at $347/mt FOB, translating to $367-370/mt CFR. This contract has been discussed in the market since late last week, but last week market sources were saying that the more reasonable level was assessed at $390/mt CFR, based on what major sellers could offer. At the moment, sources believe this is the current tradable level in Turkey. “I am sure someone sold at this level. Even distributors in the secondary market in Turkey are selling at the equivalent to $380-385/mt CFR,” a source said.
Moreover, an offer from one Russian mill has been voiced at $370/mt CFR to India, translating to $340/mt on FOB Black Sea basis. Market sources agree that this level is too low for most sellers. However, since this offer has been given by one mill, other producers, that have limited options for where they can sell, will be not able to compete in the Indian market, with offers up to $390/mt CFR.
Some small sales of ex-Russia BPI have been done at $400/mt FOB, but this level has been only for small volumes for foundries and is considered to be unworkable for the market in general.
In Europe’s import pig iron market, bids from large buyers have dropped by $10/mt to $390/mt CFR, but “there are no strong discussions, only talking,” an importer said. An offer from Ukraine has been heard at $430/mt CFR, down by $10-15/mt over the past week. But even distributors have not been ready to pay high prices and are assessing the market at below $420/mt CFR.
The SteelOrbis reference price for ex-Russia BPI has settled at $340-360/mt FOB Black Sea, with a midpoint at $450/mt FOB, down by $17.5/mt on average over the past week.