Although price trends in the global billet and longs markets have been mainly downward lately, some rebound has been seen in ex-Iran export deal levels. Still, given the rather unfavorable outlook for Iran’s regular outlets for square billet, market players believe the trader that booked this cargo will have some trouble selling it.
Particularly, according to sources, a large Iranian steel producer has recently traded 30,000 mt of 150 mm 3 SP billet at $492/mt FOB for end-of-June production. The previous ex-Iran export billet sale was done around 15 days ago by another local mill at $481/mt FOB for a similar tonnage. Another deal has also been reported at $494/mt FOB from another mill, but the information has not been confirmed by the time of publication.
Market players are questioning the destination, to which this latest cargo will be sold by a trader. Asia is not an option in the medium-term, as the latest ex-China offers from traders going short have recently been reported at $485/mt CFR to Indonesia and Thailand. The freight from Iran is estimated at $40-45/mt minimum, not mentioning the trader’s margin. In the GCC, local producer Emirates Steel Arkan has decreased its rebar price by $25/mt over the past month, which has obviously increased the pressure on billet prices in the region. The CPT billet price from Iran according to the $492/mt FOB sale is estimated by Emirati buyers at around $530-540/mt, while the previous negotiations of around two weeks ago were at around $505-510/mt CFR or around $520-525/mt CPT. In Turkey, despite a slight rebound in scrap prices, the billet market remains rather depressed due to aggressive Chinese offers. In addition, the CFR price for ex-Iran billet according to the latest FOB sale comes to around about $540/mt CFR minimum. “There is no point in paying this price for sanctioned material if the duty-free Malaysian material is only $10/mt higher,” a Turkish buyer commented to SteelOrbis. While the abovementioned destinations are hardly expected to accept higher prices from Iran, the recent export billet sale may be destined partially for Iraq, some market players speculated.