As expected, the reversal of the trend in the Chinese market in the second half of October, accompanied by the sharp drops in futures and spot prices, in particular, has had a knock-on effect on billet export activity and prices from Iran. China had recently been the main export destination for ex-Iran billet.
Accordingly, following quite a long absence of any ex-Iran billet trading, a 30,000 mt cargo of ex-Iran steel billet changed hands at $620/mt FOB recently, down $20/mt from previous ex-Iran billet tenders closed at the beginning of October. The destination has not been confirmed by the time of publication, but any country in Southeast Asia could be the destination. As SteelOrbis reported previously, following the collapse of China’s import billet trade, the world’s traders have started to redirect their position cargoes to other destinations outside China, and have succeeded in attracting interest from customers based chiefly in Southeast Asia and East Asia. Taking into account that the latest tradable levels for re-directed billet have been fixed at $660-670/mt CFR in the region in question, the positions of Iran-based billet suppliers have continued to soften further, with prices expected to keep sliding in the coming tenders. Specifically, with freight from Iran to Southeast Asia being assessed at least at $55/mt, the CFR price with regard to the abovementioned deal is $675/mt CFR at the lowest. “Prices are decreasing sharply on the heels of recent developments in China. We have opted to leave the market for a while,” another Iran-based billet exporter stated.