Workable prices for ex-Iran billet on exports have decreased as expected, given the unfavorable business situation in most traditional sales outlets and the gloomy global outlook. As a result, according to sources, the latest deals have been closed at a discount from the initially targeted prices. In addition, there have been certain amendments to steel export regulations which may impact trade.
According to market sources, two Iranian square billet producers have recently sold 30,000 mt each for May shipments. The reported price level is at $518/mt FOB, although some market players say they were at $520/mt FOB. Such a level has been expected since the end of last week versus mills’ latest expectations at $540/mt FOB maximum.
The concluded price may be workable in several sales outlets, particularly in Asia. The estimated ex-Iran trader’s CFR price is at $565/mt or slightly above, while ex-ASEAN offers are at $580/mt CFR. Still, discounts for the regional origins are possible from trading companies and so business has been muted. As a result, the evaluated price from Iran is in line with expectations, but buyers are expected to take a wait-and-see stance for now.
In the GCC region, the $520/mt FOB level may also be workable, since the latest position cargo offers to the UAE stood at $570-580/mt FOB, which equals around $590-600/mt CFR and around $605-610/mt CPT.
In Turkey, the workable prices for ex-Iran billet are not above $570/mt CFR for small tonnages with estimated freight of around $60/mt.
According to Iranian market sources, the local government has recently amended the steel export regulation, but the full details are yet to become clear. Some market players report an additional 0.5 percent export tax has been imposed for products including raw materials and semis. In addition, there is information in the market that from now on “all mills have to bring their export [volumes] to the export ring of the Iran Mercantile Exchange (IME).” It Is believed that one of the reasons is the government’s aim to create competition and to make the market attractive, including opening up some opportunities for a wider circle of companies. “The first attempt on Saturday was not successful and now mills are exerting pressure to change it,” a market source told SteelOrbis.