Posted on 31 Aug 2023
Amid low cargo availability in September, Iranian mills have raised their October-readiness billet export target price to $470-475/t fob, taking Esfahan Steel's (ESCO) latest billet tender, which closed at $475/t fob last week, as a benchmark. However, in Iran's major semis market, the Far East, due to macroeconomic challenges and low demand, Indonesian local billet prices softened to and below $490/t fob Indonesia.
The rebar buying price in Singapore is $535-540/t cfr theoretical weight, equating to $500/t fob Oman, Qatar or the United Arab Emirates. Semis prices are under pressure from weak rebar, notes Kallanish.
"Fundamentals are weak in Iran's main semis export market, the Far East. Local billet prices have softened and have settled at and below $500/t fob in Indonesia. Iranian mills are behind their production targets due to power cuts. October cargo availability will be more, but consumption in neighbouring Persian Gulf countries will not meet the allocated billet export volumes," says a trading company official. "Iranian mills have increased their target price to $470-475/t fob, but serious challenges may force them to revise it.
Khouzestan Steel has informed its potential customers that it plans to allocate billets for export in October, not September, aiming to catch up with previously-scheduled production volumes.
In the United Arab Emirates, from mid-September until the end of the year, rebar consumption is expected to increase by 10% on-year to 230,000 tonnes/month. Thereby, rebar re-rollers could elevate their billet purchasing volumes. However, Iran exports nearly 425-4500,000t of billets monthly, and the Middle East's buying capacity is insufficient to accommodate the allocated export volumes.
Source:Kallanish
