Prices for ex-Russia basic pig iron (BPI) have increased this week, supported by further sales to Europe, where some buyers can agree to accept higher levels for raw material in anticipation of increase in both flat and long steel prices. However, the prices have been supported only by the situation in Europe, and demand and bids from other sales destinations have remained low.
Deals for 80,000 mt of ex-Russia BPI have been done to Europe at $445-455/mt CFR, translating to $420-427/mt FOB. The previous sales to Europe for Russian origin were at $435-440/mt CFR. The major reason behind the higher deal prices was talks about anticipated increase in the HRC market following developments in relation to steel safeguard measures, while in the local longs market in Europe there have been some reports about price increases of €20-30/mt by ArcelorMittal (particularly, according to some sources, in eastern Europe). Nevertheless, for a number of sources, this development has been surprising. “I don’t see buyers at these high prices, while sellers don’t want to accept $405/mt FOB, that buyers want,” a Europe-based source said.
Offers for ex-Ukraine BPI have been reported to Italy at $470/mt CFR. There have been some inquiries for non-Russia material over the past two weeks as the quota for Russia pig iron may be exhausted before the year end and buyers will have to find sources for the fourth quarter.
As for Turkey, bids for Russian pig iron from distributors mainly have been still at $405-410/mt FOB as the highest, translating to $425-430/mt CFR, but most offers have been starting from $415/mt FOB, in particular from Donbas, the Ukrainian territory, occupied by Russia.
Bids from other destinations like India have been even lower – around $440/mt CFR, translating to just $400/mt FOB Black Sea for a large vessel.
The reference price for ex-Russia BPI has been settled at $410-425/mt FOB versus $410-415/mt FOB last week, moving up by $5/mt on average over the week.