The weaker price situation in major consuming billet markets has prevented Iranian exporters from closing their tenders announced earlier this week. The traders’ price idea is considerably lower than the mills’ idea which is a result of the general downtrend in the global billet and scrap markets. In particular, in Asia and Turkey the workable billet prices have dropped, while in the Gulf Cooperation Council region billet prices have been relatively stable, but activity is weaker during Ramadan.
As a result, the workable FOB prices for ex-Iran billet are foreseen to be significantly lower than the levels initially targeted by some suppliers in their announced tenders. As SteelOrbis reported, early this week two Iranian mills announced sales for 30,000 mt of billet each, which are due on April 7 and April 9. Additionally, another large supplier has been in the market with a similar allocation with the target at $560/mt FOB, which is in line with last week’s indications. However, given the significantly weaker fundamentals, most sources doubt the workable price for ex-Iran material will be higher than $535-540/mt FOB, while some GCC-based players expect deals at even lower levels. “The real price levels are not to be seen yet, maybe the mills will skip selling this time and wait for a better market,” one trader assumed.
In particular, in the Asian market, the offers for Iranian materials are expected from traders at not higher than $570-575/mt CFR, down $20/mt from the previous level, while freight is estimated at around $40-45/mt. In Turkey, where Russian and Asian billet is offered at $580-605/mt CFR, the expected price level for ex-Iran billet is at not higher than $560-570/mt CFR for the new month of production and maybe a bit higher for ready cargoes. In the GCC, the latest deals have been closed at $610-615/mt CFR UAE for position cargoes. “In the UAE, billet from Iran will remain in demand and the longs situation is not bad over there, but the sales volumes will not be satisfactory for the suppliers,” a source told SteelOrbis.
The SteelOrbis reference price for ex-Iran square billet has moved down by $10/mt on the upper end over the past week to $540/mt FOB in view of the absence of trading activity.
