Despite the absence of billet tenders in Iran during this week, Iran-based suppliers are determined to increase their target prices in the upcoming tenders next week, based mainly on solid support from booming demand for billet in China.
Accordingly, following the rapid price increase for billet in China this week, international traders have started to test the Chinese market with fresh offers for ex-Iran billet at $700-710/mt CFR China. Moreover, there has been talk in the market of a transaction reportedly done for ex-Iran billet at $700/mt CFR. Although the information could not be confirmed by the time of publication, the deal may well have been concluded, market participants believe. The latest booking for ex-CIS billet has been done to China at $715 mt CFR.
Taking into account that the most recent tender for billet was done by a key Iran-based producer in late April at $620/mt FOB BIK, and even considering financing costs, ex-Iran billet prices are poised to increase noticeably next week, SteelOrbis believes.