Iranian mills have succeeded in selling several billet export lots following a rather long period of silence. However, the reported prices are considered to be on the higher side by a majority of market players given that the situation in most consuming destinations is not very promising.
According to sources, Khouzestan Steel Company (KSC) has sold 30,000 mt of billet lately at $482/mt FOB, while Esfahan Steel Company (ESCO) has traded a similar lot at $480/mt FOB. In addition, Chadormalu Minining and Industrial Company has sold a 20,000 mt lot at $475/mt FOB, sources say.
Although the prices are pretty much in line with the level in deals closed in May, the market reality in the key consuming markets does not quite support those prices. The latest workable level for ex-Iran billet in Asia has been reported at $505/mt CFR Indonesia, while freight is at around $35/mt. “The buyer [for the mentioned tender deals] has not been announced but it can’t be the Far East as the prices are not compatible for Southeast Asia,” a market source told SteelOrbis.
In the GCC, offers from Iran are mainly at $510-515/mt CFR and above with $20-25/mt freight on average and depending on the port of discharge. As a result, there is a greater chance of selling these position cargoes to the Middle East, although buyers are insisting on minimum $10/mt discounts. In addition, they have an alternative with IF billets, offered at $430-440/mt FOB to Oman. India may also be interested since there is a firm bid reported at $520/mt CFR, with around $40-45/mt in shipping costs.