Ex-Russia BPI corrects up in line with general market mood, buyers still resist

Friday, 03 May 2024 17:22:02 (GMT+3)   |   Istanbul
       

Prices for basic pig iron (BPI) from Russia have inched up this week as some Russian mills managed to push volumes to alternative markets a bit earlier and the pressure from unsold allocation is not as big as it could be. Also, there is very cautious optimism in the scrap market, providing some limited support.

The SteelOrbis reference price for ex-Russia BPI has settled at $400-410/mt FOB Black Sea, up by $5/mt on average over the past week as the lower end has gained $10/mt.

This happened as market sources reported the workable level for European steel mills at $430/mt CFR, translating to $400/mt FOB. The market sources cannot say that there has been an improvement in the European market as the attempts to increase longs prices in Europe are at a very early stage. However, as the general mood is cautiously optimistic and the sellers of BPI keep insisting on higher prices, some slight upward correction is inevitable. “I believe that $400-405/mt FOB is the real market level for now, but for traditional markets like Europe or Turkey,” a market source said. Also, for foundries, the workable prices are around $5-10/mt higher. Official offers from mills are still significantly above this, at $420-430/mt FOB Black Sea, but all market sources agree that these levels are indicative and, based on needs to push volumes, producers may accept $400-410/mt FOB depending on the quality of the material.

In Turkey, there is a rumor that some buyers have been in negotiations at $430/mt CFR or just slightly above given their need to replenish stocks. This translates to $410/mt FOB Black Sea. But some market sources have said sales recently have been done in the secondary market from stocks already purchased by traders, not direct sales from mills.

Also, there has been information that one sizable lot of Russian BPI was traded to India, but a little earlier, at $420/mt CFR or even slightly above. As the freight to India from the Black Sea exceeds $40/mt, the FOB price translates to below $380/mt FOB. But this level is said to be too low for all other traditional destinations and the deal was done to ease inventory pressure, according to sources.


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