Ex-Iran billet prices, which had been trending down in deals for a while, have lately shown a considerable rebound in a couple of deals. The mills are not yet feeling confident regarding the sustainability of the uptrend, though they report an increased number of inquiries from regular trading companies. The expected rise in production costs due to season-related electricity issues is another supportive factor. “Billets to the north from Dubai are getting stronger, especially during the summer months with electricity shortages,” a trader said.
According to sources, a 30,000 mt 150 mm billet deal for June shipment has been closed by Khorasan Steel Company at $481/mt FOB BIK, which is around $20/mt higher than the previously closed sale done by the same producer around 10-15 days ago. “There is more demand actually. Numerous traders are sending inquiries,” a source told SteelOrbis.
In fact, the bigger billet exporters from Iran may count on even higher sales prices, according to local market players, since it is believed that Khorasan Steel’s sales price is usually $10/mt lower that those of the others. Accordingly, Iranian mills may target further uprises.
However, the end-user markets are not quite supportive of the price uptrend. The latest ex-Iran offers from traders have been reported at $520/mt CFR Indonesia, with $40-45/mt estimated freight. In the meantime, in the GCC, negotiations have been heard at around $500-515/mt CFR UAE/Oman, with $20-25/mt estimated delivery cost.