Major buyers from Turkey and Italy are still insisting on lower basic pig iron (BPI) prices from Russia, even though the trend in the scrap market is uneven and prices have failed to increase but cannot move down further either.
The SteelOrbis reference price for ex-Russia BPI has settled at $370-380/mt FOB, with the midpoint at $375/mt FOB Black Sea, down by $5/mt since late last week, since, even though offers are still higher, buyers are in a strong position.
Turkish buyers’ price ideas have been reported at $400/mt CFR at the highest, translating to around $375/mt FOB Black Sea, excluding freight, while some sources have even voiced the lower level of $365/mt FOB. However, suppliers have been insisting on higher levels with the rare offers to steel mills and foundries at $410-420/mt CFR. Some sellers are still insisting on $400/mt FOB, waiting for scrap to rebound in the near future. However, until the trend in the scrap market is settled, this scenario is unlikely. At least one major mill from Russia has dropped offers to $390/mt FOB and in negotiations to lower levels. “If you need to sell, you will offer this level [$370-375/mt FOB], otherwise, it is not the market level,” a trader said.
Also, steel mills in Europe are ready to pay $370-375/mt FOB, which translates to $400-405/mt CFR Italy. As for the foundries, the tradable level is around $10/mt higher, but still with no new deals reported so far. “The market is difficult and it will remain as it is in the next few weeks. The same as for scrap, even if sellers are all trying to resist, the real problem is the absence of sales,” a European source said.
The supply from Russia is stable, with some mills eager to sell, but offers from mills in Donbass, located in the Ukrainian territory occupied by Russia, are still absent and are expected only from April at best due to halted production, management changes and the focus on sales of steel products to Russia in some cases.