Posted on 03 Jan 2023
Iranian 150mm 3sp billet offers for February delivery to United Arab Emirates and Oman at $540-550/tonne with 25% advance payment are concerning rebar re-rollers.
Moreover, Iranian billet producers have extended their closing date for billet tenders to secure higher prices. Bidders are thus concerned about supply shortages. Traders and stockists expect further price increases and are seeking alternatives in India and other countries, Kallanish notes.
"In the previous week, January-delivery rebar grade billet cargoes were committed at $475-480/tonne fob Iran, equating to $505-510/t cpt in UAE and Oman,” a senior international trading company official said last week. “However, for February deliveries, there are no cargoes available. We expect a shortage of Iranian billet in the [UAE and Oman] market, or a further price increase.”
“Our suppliers use natural gas shortages as a pretext, as well as direct reduced iron price increases and exchange rate dilemmas in Iran,” he continued. “Due to all these reasons, billet tenders in Iran have yet to be finalised and are extended to an indefinite day. Current indicative prices are at $505/t fob Bander Abbas [Iran] but there is no allocation.” He expects a clearer picture in the first week of the new year.
In Oman, electric arc furnace billet prices have risen to $540-550/t fob for the UAE market. But producers are observing the market, adopting a wait-and-see policy, and holding their offers.
In UAE, a rebar re-roller floated a billet enquiry for 20,000 tonnes for January delivery. Local induction furnace mills are targeting $530-550/t ex-works but are prepared to elevate their quotes another $15-25/t, on the back of a $25/t rebar price increase for January deliveries.
Domestic scrap prices are stable in UAE at AED 1,250/t ($340) for HMS 90:10 and AED 1,190/t ($324) for HMS 80:20, both delivered on a cash payment basis. Due to the UAE scrap export ban, scrap traders' inventories have expanded, and a price decline is highly likely.
Bahrain's sole and largest producer also raised its target price above $560/t fob upon new developments in the market. The company focuses on the Saudi market, where induction furnace billet is offered in the domestic market at SAR 2,100-2,150/t ($560-573) ex-works.
In the meantime, the Russian rouble has depreciated against the dollar. The billet market is eyeing Russian material, with Russian billet offers varying between $500-510/t fob Novorosissk.
The week before last, 26,000t of electric arc furnace Russian billet was sold by one company to multiple buyers in Turkey at $510/t fob, equating to $550-560/t cfr Turkey. To India, sellers aimed for $550/t fob, but buyers' highest bids were at $510/t, and the tender was cancelled due to the significant difference in RINL’s bid.
Source:Kallanish
