Facing restrictions imposed by the Iranian government to prevent a further worsening of the power crisis in the country, Iranian exporters of steel billet have been forced to leave the export market this week. “We cannot have any export sales contracts until further notice from the Iranian government,” an official at an Iranian steel mill stated. Despite significant volumes of ex-Iran billet having been booked previously (at least 120,000 mt of billet only last week) and the uncertainty regarding the duration of the restrictions, the recent developments have already affected sentiments among market insiders. “The supply from Iran is very limited these days. Thai buyers have started to panic,” a major international trader based in Hong Kong commented with regard to the situation.
Meanwhile, bullishness in the billet market in Asia has continued to pick up this week. In particular, an international trader sold a 20,000 mt ex-Iran billet cargo to Thailand at $625/mt CFR this week, SteelOrbis has learned. This is a $10/mt increase compared to the level in a deal for 40,000 mt done last week.
On balance, taking into consideration the recent developments, the SteelOrbis reference price for ex-Iran billet exports has remained unchanged at $550-555/mt FOB, but with the potential to rise further in the event of an export trade resumption while prices are rising higher in Asia, which is Iran’s main export destination for its steel billet.