International billet traders have continued taking new positions from Iranian mills, after the purchasing lull seen in May and early June. Moreover, they are paying slightly higher prices for new cargoes, though there is not much improvement seen in the main sales destinations such as Asia and the GCC.
According to sources, in recent days some Iranian mills have traded billets in their export tenders within $491-493/mt FOB, up from the previous sales at $490/mt FOB. The latest transactions have been closed for two lots of 30,000 mt each and one lot of 20,000 mt, market players report. The cargoes are for August delivery.
Most market sources believe that these volumes will logically be sold to GCC countries, though where offers of $510-520/mt CFR to the UAE and Oman are barely profitable, these being equal to the levels of the ex-Iran FOB prices with $20-25/mt freight. Some traders believe that closer to the end of summer the rebar demand in the GCC may be a little better due to seasonal factors and some higher project activity in Saudi Arabia in particular.
In Asia, $491-493/mt FOB deal prices are not yet workable, since the latest CFR indications are still reported at $520-525/mt CFR and up to $530/mt CFR. With freight at $40-45/mt for regular cargoes, the most recent positions leave no margin for traders in the case of sales to Asia, at least for now.