Iranian electric arc furnace-route mill Khouzestan Steel Company (KSC), located in the south, was heard finalising its last billet tender at below expected price level.

An optional volume of between 20,000 and 50,000 tonnes of 150mm 3/5sp billet was concluded at $488-490/tonne fob Iran for mid-August readiness. The mill was targeting $495/t fob, which is currently not workable in Iran’s traditional semis markets, Kallanish notes.

On 16 June, the country's sole blast furnace-route steel maker, Esfahan Steel Company (ESCO), will close its August-shipment 150mm 3/5sp billet tender for a 40,000t parcel. Located in the country's centre, ESCO's semis tenders conclude at $5-10/t more than other steelmakers. The mill is heard targeting $495-500/t fob Iran.

"Today, when you examine potential Iranian billet markets, the realistic price for Iranian billet is $485/t fob. Buyers in the Gulf Cooperation Council are mostly booking Saudi billet due to its price advantage. In UAE, Saudi-origin induction furnace-route billet concluded at $495-510/t delivered versus Iranian electric arc furnace-route billet offers at $520-525/t delivered,” opines a reputable trader.

“We cannot compete – after sea freight, port charges and demurrage, an accumulated cost of $35-40/t is added on the fob price of Iranian billet – if billet is more than $485/t fob,” the trader continues. “In the Far East, Chinese billet offers are at $520-530/t cfr Indonesia and $530-540/t cfr Philippines, which is lower than Iranian material if it is at $490-495/t fob."

Due to electricity supply curtailment, some Iranian mills have suspended their production. There is limited semis cargo availability in Iran, which is expected to continue for another few months.