EghtesadOnline: Iran’s square billet producers chose to lower their prices to meet export customers’ price expectations and boost demand.
In addition, a significant downturn in Turkey’s import scrap tags along with loyal price policy from the CIS played in favor of lower offer levels from Iran as well.
Foreign buyers supported the sellers with some significant demand, mostly coming from Asia and traditional MENA customers, Metal Expert reported.
Currently, Iranian producers are quoting billet at $375/ton FOB, which is $10-15/ton below the level of previous contracts signed at the end of December and in the first half of January. In particular, offers at such a level were heard in the UAE this week, Financial Tribune reported.
It is worth mentioning that over the past couple of weeks, some significant demand was coming from Southeast Asia, while buyers from the Middle East were also quite active.
Iran’s key steel billet exporter, Khouzestan Steel Company, managed to sell 55,000 tons to Thailand and some smaller quantities to Egypt and Sudan (30,000 ton and 10,000 tons respectively) at $375/ton FOB. All deals were closed around two weeks ago.
The company is welcoming bids for March shipment semis, although the official tender is expected to be opened within at least a week.
“If we get a good price between the tenders, we will negotiate it as well. Now we may consider even $370/ton FOB,” a KSC source said.
Esfahan Steel Company, which opened the tender for 30,000 tons of square billet two weeks ago, is now about to close it.
“We are finalizing billet sales for February shipment at $375/ton FOB,” a source told Metal Expert. It is worth mentioning that the producer exported 330,000 tons of billet over 10 months of the current Iranian year (started March 20, 2016) mostly to the UAE, Jordan, Egypt and Oman, while some smaller volumes were booked in Thailand and Sudan, ESCO’s representative said.
Iran’s billet supplier Kish South Kaveh Steel has some 30,000 tons of 130-mm and 150-mm billet to be shipped in February. The company is currently welcoming bids, while the tender is expected to be finalized in early February.
The price for SKS billet on FOB Bandar Abbas is based on the US dollar, but there is a possibility to set it in the euro or the UAE dirhams as per the seller’s option, provided the exchange rate is specified and confirmed by both sides before any transaction.
SKS has an ambitious goal to boost export share from the current 35% to 80%, taking into account its close location to the port.