Following a rather long period of relatively silent demand for Iranian billet, Iranian mills have finally sold large volumes, but to do so they have had to lower their target prices significantly. At least three Iranian billet exporters have closed tenders for significant volumes, while the general workable price level for billet of this origin has dropped from $430-440/mt to $415-425/mt FOB.
In particular, Iran’s Khouzestan Steel Company (KSC), according to sources, has sold 70,000 mt at $420-425/mt FOB, while Esfahan Steel Company (ESCO) has traded 30,000 mt at $422/mt FOB. In addition, Khorasan Steel Company has managed to sell around 20,000 mt at $418/mt FOB, SteelOrbis has learned. All cargoes are for end-of-February and March shipments. “Although the price drop is quite significant, the mills are quite fine with it since the currency depreciation makes exports more attractive. The government’s recent regulation on currency rates for exporters is also helping,” a market source told SteelOrbis.
Still, many market players warn of prevailing issues with electricity and natural gas supplies to the industrial sector during the winter months. A lot of mills are under pressure because of high costs and are forced to cut production. Currently, the workable billet export price levels from large Iranian first-tier mills are assessed at $420-425/mt FOB, while smaller suppliers might consider $415-418/mt FOB. Iran’s IF billet is on offer at $405-410/mt FOB. In addition, a 10,000 mt ready billet cargo is available at Bandar Abbas port at $430/mt FOB, sources report, which is considered to be quite high.
The sales prices in the abovementioned billet export tenders are most likely to find acceptance among GCC buyers, namely, those in Oman and the UAE. The CFR-based price levels are assessed at $450-460/mt CFR including traders’ margins, which is quite workable in the region. However, some sources assume $440-445/mt CFR levels should be possible also. In Asia, the latest indications from Iran have been reported at $450/mt CFR, which is quite competitive after a period of absence of the suppliers and taking into account that 3SP billet of Asian origin in the region is now on offer at $465-470/mt CFR.