Aiming to take advantage of a rise in demand in Asia, by the end of last week the main Iran-based steel mill Khouzestan Steel floated two tenders for steel slab, versus the single tender initially scheduled. Although the prices in both transactions are $18/mt cheaper compared to the levels achieved in the previous tenders closed two weeks ago, the producer has benefited from selling sizable volumes, which in such circumstances is considered as a good sign by market insiders.
Specifically, on Friday, October 8, the company closed two tenders, each one for 40,000 mt of steel slab, for shipment in November at $660/mt FOB BIK. As the material is allegedly destined to be shipped to China and Indonesia, the CFR price is hardly likely to be lower than $720-725/mt CFR, taking into account the freight rate assessed at $60-65/mt. The decrease in prices over the past month was entirely expected, taking into account the developments prevailing in the market. However, these transactions appear likely to be a sign of a positive outlook for the future and, in particular, of a rise in inquiries for slab from Asian customers.
Meanwhile, suppliers of non-Iranian steel slab are currently seeking to achieve $750-760/mt CFR levels in new bookings.