Iranian steel producers have returned from the holiday and are eager to trade their materials. One of the steel producers, Khorasan Steel Complex (KSC), has floated a 30,000 mt billet tender on FOB Bandar Abbas terms and for September delivery. The tender is valid up to July 8.
According to sources, the expected price for ex-Iran billet nowadays is around $490/mt FOB or slightly higher, while the most recent tender was closed by another producer at $493/mt FOB before the holiday. Such a price is expected to work mainly in the GCC region in sales to the UAE or Oman, where traders’ most recent CFR offers stood at $515-520/mt and the freight is estimated at around $25/mt. In Asia, indications from traders for ex-Iran origin have been reported at $518-520/mt CFR with bids at as low as $510/mt CFR. As a result, given around $40-45/mt freight for decent cargoes and the traders’ margin, $490/mt FOB BIK levels would not work for Asian markets, at least for now.
In addition to billet, KSC has launched a tender for 50,000 mt of DR pellets with the validity until July 8. “This is the first time I see their pellets [in the market]. It looks like an electricity shortage here,” a trader said. Indeed, Iran has started to witness the traditional limited supply of electricity related to seasonal factors. As a result, Iranian mills are expected to slow down their production, which would mean that the semis supply from the country may be limited in the coming week.
In the slab segment, the latest tender was closed before the holidays by Mobarakeh Steel Company (MSC) at $465/mt FOB for a sizeable lot.