Russian BPI export activity has been slow this week, but the talk about further price movements has been rather lively. Russian producers are aiming to increase prices by $5-10/mt in new sales to Europe, saying that allocation is limited. However, buyers are describing the market as “really bad”. The stand-off between buyers and sellers next week may result in a clearer market picture for the coming two weeks.
New offers for August shipment BPI from the main Russian seller have been at $460/mt CFR Europe, which translates to $435/mt FOB Black Sea for big lots up to 50,000 mt. This is an increase from the previous contracts done at $445-455/mt CFR some time ago, and definitely signals that the mill is targeting further increases. “I think there is not much availability for pig iron and prices are quite firm. Whoever believes $440/mt CFR is achievable might not get it now, at least for big volumes. Sales are slow but still at high prices,” a source in Europe said.
However, a least three market sources have reported that another Russian mill has been able to give $435-440/mt CFR for smaller volumes and some special conditions. “If this price is available for any volume, we need to consider it,” a trader said. Some market sources said that up to 30,000 mt of BPI are available from the abovementioned supplier. The reasons why European customers have been strongly resisting any higher prices is the seasonally weak demand. “In Germany, the foundries are working only two days per week, while the seasonal lull has come to Italy a month in advance this year,” another trading source said.
“This is one ‘but’ - the quota has been exhausted by 600,000 mt and will be finished in October. That is why in September we will see a sharp price increase, and a part of that increase may be seen in August already. However, July will be silent as the pre-vacation month [in Europe],” another Europe-based source said.
Also, the previously booked small volume of ex-Ukraine BPI is heard to have arrived in Europe, sold at near $450/mt CFR in early June.
The SteelOrbis reference price for ex-Russia BPI stands at $405-430/mt FOB with the upper end increasing by $10/mt mainly amid higher offers, but some low-priced offers at the lower end of the range are still heard in the market.