After increases in offers last week, some Russian basic pig iron (BPI) sellers have managed to confirm slight increases in deals in Turkey compared to the levels seen in late September. But they have not managed to achieved their desired levels, and so the reference price has been adjusted down slightly over the past week.
The SteelOrbis reference price for ex-Russia BPI has settled at $350-370/mt FOB Black Sea, down by $5/mt on average over the past week, but still $10/mt higher compared to fortnight.
A deal for 10,000 mt of Russian BPI has been done to Turkey at $395/mt CFR, which translated to $370/mt FOB Black Sea. This level has been expected, but a lot of buyers are still hesitating to confirm it in deals, even after the increase in scrap prices in the country. There have been rumors that BPI from Donbass, the Ukrainian territory currently occupied by Russian troops, has been available at $350-360/mt FOB, but there has been no confirmation that the deals were done at this level. “I believe that next week buyers will be more willing to confirm $395-400/mt CFR… and at the end of the month we can reach $390-400/mt FOB Black Sea if the trend is sustained,” one of the sellers said. However, the overall mood in the market is far from optimistic since the overall offered volume from Russia remains high and the sales destinations are limited given the absence of sales to Europe, where the quota for Russian BPI has been exhausted for this year. Moreover, “more mills will eager to sell pig iron in October while the export duty is 5.5 percent, as in November it is obvious that it will increase to seven percent,” a source commented.
One Russian mill is still asking for $390/mt FOB for low-manganese material, but Turkish buyers have not been ready for this price as with the increased freight rate it is equivalent to $415/mt CFR.
At the same time, the tradable level for imported pig iron in India, another open sales destination for Russian sellers, has been at $380-385/mt CFR, translating to $340/mt on FOB Black Sea basis. No new deals have been reported as only one mill is ready to negotiate at such a low level.
In Europe, the market has been stable at a low level. Steel mills have been holding bids at $400/mt CFR with no improvement in local demand. A sale of Ukrainian pig iron at $430/mt CFR was done three weeks ago and no fresh bookings have been done, with the highest tradable level for foundries still at $420/mt CFR at the highest.