The drop in demand for imported billet in China in recent days has resulted in traders reducing the bid prices placed in new tenders with Iranian mills, Fastmarkets learned on May 19.
Sirjan Jahan Steel was looking for $690-700 per tonne fob in the assessment week’s tender on a sale from Arfa Iron & Steel done last week at $695 per tonne fob Southern Iranian ports, one trading source said.
The traders that took part in the Sirjan Jahan Steel tender, however, were ready to pay $630 per tonne fob maximum, sources told Fastmarkets.
The traders reduced their bids due to the drop in demand from the Chinese market, which has been the major outlet for Iranian semi-finished steel lately.
The support coming from Chinese customers in recent weeks faded after local billet and rebar prices in the country started to fall amid adverse weather conditions and a crash in rebar futures.
Fastmarkets’ daily assessment of steel reinforcing bar (rebar) domestic price, ex-whs Eastern China was 5,370-5,400 yuan ($836-840) per tonne on May 19, down by 180 yuan per tonne day on day.
Billet Assessment ***
Fastmarkets’ daily assessment for steel billet domestic, exw Tangshan, Northern China was 5,470 yuan per tonne on the same day, down by 70 yuan per tonne day on day.
Following this, Chinese customers’ bids for import billet were heard as low as $700 per tonne cfr on Wednesday, which would be equivalent to around $650 per tonne fob Southern Iranian ports, down from bookings of Iranian billet heard in China last week within the range of $750-780 per tonne cfr.
Under such market conditions, Sirjan Jahan Steel cancelled its tender and sources said the company would re-open it later in the week to May 21.
A compatriot producer Khouzestan Steel opened a tender for 30,000-40,000 tonnes of billet targeting $720 per tonne fob, sources said.
Fastmarkets’ weekly price assessment for steel billet, export, fob ports Iran was $630-720 per tonne fob on May 19, against $657-695 per tonne fob a week earlier with a midpoint left largely unchanged at $675 per tonne fob.
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