Posted on 30 Nov 2023
Cold winter days have begun to be felt in northern Iran after the first snow fell, raising the alarm that natural gas restrictions are imminent for the steel industry. With domestic demand subdued, mills are shifting their domestic allocations to export markets, where the latest tenders closed with an increase versus last week, at $467/tonne fob, notes Kallanish.
ESCO, Iran’s sole blast furnace-route producer, finalised a 30,000-tonne 3sp billet tender at $472/t fob for mid-January readiness. This cargo is believed to have been shifted from the domestic market because the firm’s billet export tender for end-February readiness was closed more than two weeks ago.
Iranian mills, amid natural gas shortages expected to be implemented within two weeks, have increased their billet export prices to and above $475/t fob. Buyers in Iran's largest semis market in Asia, Indonesia, are ready to pay $510-515/t cfr Indonesia, from which $33/t sea freight has to be deducted to net back to fob Iran.
"Billet supply availability is low for January-load readiness and the cold weather is also approaching, so we are concerned there will soon be a shortage of natural gas. When gas flow drops, utilisation will fall and supply will be diminished. The improved sentiment in the Far East has motivated mills to seek higher prices, but no one knows if the recovery will continue after the Chinese New Year – from 10 February 2024,” says a reputable trader.
Source:Kallanish
