Iran’s billet exporters continue to benefit from stronger demand in Asia

An optimistic outlook as regards future price trend developments in the semi-finished steel market in China and a subsequent rise in interest from buyers have continued to encourage Iranian billet suppliers to be strongly active in exports. Moreover, besides reviewing target prices in tenders, some suppliers are taking the decision to increase supply volumes, aiming to take full advantage of the current developments in the market.

Specifically, by the end of last week, the main Iran-based steel mill Khouzestan Steel had closed three tenders, each one for 40,000 mt of steel billet, for shipment in November. The price in the abovementioned tenders was fixed at $640/mt FOB BIK, which was in line with the expectations of market insiders, but $1.5/mt higher compared to the price received in the previous deal done by another Iran-based steel mill. “The market is gradually going to thrive again,” an official at an Iranian steel mill stated. As the material is destined to be shipped to China and Southeast Asia, the CFR price is assessed at $700-705/mt CFR, taking into account the freight rate at $60-65/mt. “The price is not cheap for ex-Iran billet, but it only proves that the market is surging,” a trader in Asia commented. In the meantime, by the beginning of the current week local billet prices in Tangshan in China have increased again, by RMB 20/mt ($3/mt), after a sizable rise of RMB 100/mt ($15.5/mt) last Friday, reaching RMB 5,330/mt ($827/mt) ex-works. This translates to $731.5/mt, excluding 13 percent VAT.