Iran-based producers of steel billet have remained under the pressure of depressed demand for steel billet imports in China. Nevertheless, Iranian mills prefer not to follow the aggressive stance in their offerings. On contrary, while searching for alternative destinations, most of producers delay the announcement of new tenders, aiming therefore to contain the race of price decrease. “Maybe this week we will place a new tender,” an official at a major Iran-based steel mill stated. The mill’s latest billet tender was closed about three weeks ago. Overall, the suppliers target to get prices not lower than $580-590/mt FOB BIK levels in their future bookings, which is $5-10/mt below the prices fixed in rare deals last week.
Meanwhile, traders having ex-Iran steel billet (earlier destined for shipment to China) are strongly seeking the new customers. In particular, following the recent cancellation of safeguard duties on billet by local government in Egypt, the traders have been quick to offer their distressed cargoes there. Moreover, two cargoes for a total 50,000 mt are said to have been already changed hands to Egypt at $655/mt CFR. With a freight rate being estimated at $70/mt, the FOB price is in line with the current price ideas voiced by Iranian billet producers. Despite the abovementioned levels are widely discussed, there have been claims from some sources that the transaction has been done at $630/mt CFR in reality.
With bearish sentiments as regards the future price trend prevailing lately, customers in Asia have continued to exert pressure on ex-Iran billet suppliers. Specifically, in Thailand bids have been reportedly voiced not higher than $620/mt CFR, which corresponds to $560/mt FOB at highest, taking into account the freight rate at $60/mt.