Taking into consideration the export tariffs, Iran-based steelmakers have continued to maintain a cautious stance in trading abroad. With rare exceptions, Iranian semis have been floated under the scope of export tenders this week. By the end of the current week, information about the results of the Khouzestan Steel Company (KSC) tender has been leaked to the market. Specifically, a cargo of 40,000-50,000 mt of billet, for delivery at the end of May-early June has reportedly been traded at $666/mt FOB. With a deal price having been discussed at $650/mt FOB, market insiders have assumed that the level may have been “the average of received bids.” One way or another, the price has decreased by $17/mt compared to the levels achieved in the deal done a week ago.
In the meantime, traders who have ex-Iran billet in their hands have been forced to follow the downtrend likewise. Specifically, aiming to divert ex-Iran steel billet from China, traders have been searching to get $720-730/mt CFR in offerings to Indonesia, down $10/mt compared to the levels voiced previously. Offers to Thailand have been heard even at lower levels, namely at $715/mt CFR, for shipment in May-June.
Meanwhile, a cargo of 40,000-50,000 mt of ex-Iran steel slab, for delivery in the middle-to-end of June has reportedly been sold within the scope of an export tender at $685/mt FOB. As the material is destined to be shipped to Thailand, the CFR price is estimated to be around $745/mt CFR, given the current freight at $60/mt. The previous tender for ex-Iran steel slab was closed at the end of March at $747/mt FOB.
Some Iranian steel mills have continued to stay out of the export market, stating that the imposed export tariffs are too exorbitant to sell anything abroad. Given the current global steel prices, the export tariff for billet and slab has decreased to 11 percent and 17 percent, respectively, from 17 and 22 percent. As SteelOrbis reported previously, the rate of the export duty will be dependent on the rate of the price increase compared to the price fixed in December 2021, which has been taken as the base price.