The summer lull has put further pressure on ex-Russia basic pig iron (BPI). Prices have declined, based on falling bids, especially from Europe, as well as some increase in freight rates.
One of the main producers from Russia has been offering BPI at $420-425/mt FOB, down from $430-435/mt FOB in the previous two weeks. This price translates to near $450/mt CFR to southern Europe, and has been confirmed by a few customers. However, bids from steel mills and big buyers have been far below this. “Italy needs $430/mt CFR or lower,” a source said. This price translates to $402-403/mt FOB Black Sea. “Summer has come to Europe with halts in steel trading and lower raw materials [bids],” another source said.
In addition, a deal from one of the Russian suppliers has been heard at $435-440/mt CFR to northern Europe, though this could not be confirmed by the time of publication. The freight to northern Europe from Novorossiysk port is assessed at $30-35/mt or higher depending on the volume. Freight for medium and large lots from Black Sea ports of Russia to southern Europe has increased from $22-25/mt to $25-27/mt or higher for smaller volumes. “The market is facing the grain season,” one trader said, while costs to pass Bosphorus have also increased. Another deal from the same supplier has been rumored at $435/mt CFR or slightly below to Italy, translating to $415-420/mt FOB, but it remained unconfirmed by the time of publication.
Official offers from Russia to Turkey have been heard at $410-420/mt FOB, translating to $435-440/mt CFR, but the tradable level from serious buyers is at $425/mt CFR at the highest, according to market sources. Some volume is also heard to have been sold at near $430/mt CFR, but the details are unknown.
The SteelOrbis reference price for ex-Russia BPI in the week ending July 19 has settled at $400-420/mt FOB, with the midpoint at $410/mt FOB Black Sea, down by $5/mt on average over the past week.