Posted on 09 Nov 2023
Russian suppliers have raised pig iron export prices in response to the recent upward trend in imported scrap values in Turkey. With negotiations still ongoing, determining accurate price levels is challenging, market participants inform Kallanish.
Russian pig iron prices were assessed at $350-380/tonne fob Black Sea, up from $330-362/t fob last week.
However, Russian producers have indicated they are operating at or even below breakeven, with several factors contributing to the situation. This includes the 7% export duty in Russia from October, the strengthening of the rouble against the dollar, which makes exports less appealing, and the rising cost of raw materials, especially coke, which is currently in short supply domestically. According to one producer, current export prices are estimated to be $20-30/t below breakeven cost, with the export duty alone accounting for around $20/t.
Material from the largest Russian supplier of merchant pig iron was available at $360-365/t fob Black Sea, according to a trading source.
Turkey is driving prices with offers at $405-410/t cfr Turkey, while $380/t fob Black Sea was already achieved in a deal for 20,000 tonnes, including multiple contracts. This involved distributors, steelmakers and foundries, according to a producer and trader sources.
This situation can be attributed to the better outlook for Turkish producers of flat steel and wire rod, in view of the recent anti-dumping investigation in the country on those products (see Kallanish passim). However, with flat steel prices increasing in Turkey this week, the country’s demand remains subdued.
In Italy, the market has been expecting price increases, even though demand from domestic mills remains uncertain due to weak performance in finished product sales.
The previous lack of interest in making purchases in Italy was attributed to the inconvenient timing of arrivals in December, coinciding with the Christmas holiday season, which is very slow for business. The material currently being traded is for December shipment with estimated arrival to Italy by the end of December, making this timing more attractive for distributors, also amid a clearer price trend.
Offers of Russia-origin material were heard at $400/t cfr Italy, with bids from distributors at $390/t cfr not immediately accepted by sellers, with negotiations ongoing. The large Italian end-users were heard bidding at lower levels than the distributors.
India was on holiday, with bids at $390-400/t remaining unattractive. In Southeast Asia, Russian pig iron supplied by Evraz from Far Eastern ports was assessed at $380/t cfr. While other producers were able to achieve better prices, of up to $400/t, freight rates from the Black Sea were making that level not appealing for those suppliers.
Source:Kallanish
