The uptrend in ex-Russia basic pig iron (BPI) market has been confirmed after the leading Russian mill sold a lot to India and higher prices have also been fixed in a contract to Europe. This has brought some optimism to Russian mills, which are almost sold out for June shipment.
As reported last week, a rumor about a deal from Russia to India was circulating in the market. However, contrary to the information that a sale was transacted at $420/mt CFR, this week a number of sources said that it was done at $445/mt CFR, translating to $405/mt FOB Black Sea. “The price is so high, adding the duty [at six percent],” a trader commented, taking into consideration that duty-free ASEAN pig iron would be more attractive for buyers in India. The Russian sale price translates to around $470/mt CFR after the duty, while the latest small-tonnage deal in the local market in India was done at equivalent to $515/mt ex-works.
According to market sources, 20,000-30,000 mt of ex-Malaysia pig iron has been sold at slightly less than $420/mt FOB and the material is for a long position and so could be offered to India, Europe or Turkey in the future.
But since the ex-Russia deal to India was already done some time (over 10 days) ago, Russian exporters have been eager to sell at higher price levels. As a result, a large lot of 40,000-50,000 mt of Russian BPI was sold to Europe at $435-440/mt CFR, which translates to $410/mt FOB Black Sea. “Buyers [mainly steel mills] were bidding at $430-435/mt CFR, but sellers have been actively pushing up,” a source said. The price idea of smaller buyers in Europe has been assessed at $445-450/mt CFR, based on sellers’ targeting offer at a minimum of $420/mt FOB. This FOB price has been widely discussed in the market since last week and, if buyers have some urgent need, this would be the next deal price, according to market sources.
However, some markets are staying silent, Turkey, in particular. Offers from Russia have been at $440-445/mt CFR Turkey. “Turkish mills have better options in terms of prices such as scrap, so they are not keen to buy pig iron,” a market source said. Also, the freight from the ASEAN region to Turkey has increased recently and stands at up to $40/mt at the moment, making other even duty-free origins unattractive at the moment. “I don’t think that the mills (except foundries) in Turkey would be too much interested in pig iron at these price levels,” a local source said.
The SteelOrbis reference price for ex-Russia BPI has been corrected up by $2.5/mt since last Friday to $410-420/mt FOB, with the midpoint at $415/mt FOB, while the level is $10/mt higher compared to May 3.