In this list

Asian buyers shun Iranian steel billet on heightened risks

Electric Power | Electricity | Energy | Coal | Thermal Coal | Energy Transition | Renewables | Oil | Refined Products | Jet Fuel | Metals | Steel

Market Movers Asia, Oct 25-29: Oil supply in focus amid winter heating, soaring jet fuel demand

Metals | Steel

Platts Steel Raw Materials Monthly

Metals | Coronavirus | Steel

16th Steel Markets Asia Conference

Energy | LNG | Natural Gas | Coal | Oil | Metals | Crude Oil | Non-Ferrous

ANALYSIS: China trucked LNG prices breach Yuan 7,000/mt on high import costs, bullish sentiment

Energy | Oil | Crude Oil | Refined Products | Energy Oil | Bunker Fuel | Gasoline | Metals | Non-Ferrous | Shipping | Marine Fuels

Commodity Tracker: 5 charts to watch this week

Asian buyers shun Iranian steel billet on heightened risks

Singapore — Asian buyers of Iranian semi-finished steel like billet and slab have started holding back or lowering their bids amid heightened risks associated with buying the material, market sources said Wednesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Iran's retaliation against the US overnight - when it launched missiles at military bases in Iraq -- has led to greater risks, meaning rising costs for freight and insurance and the potential non-performance of deliveries.

As a result, buyers of billet who would still consider buying Iranian material floated bids $20-$30/mt lower than market levels, the sources said.

Buyers in Thailand were seeking Iranian material at $410/mt CFR Thailand for 5SP, 150 mm billet, according to a trading source.

That was $32/mt lower than the assessment last Friday by S&P Global Platts of $442/mt CFR Southeast Asia.

The assessment specifications is for a basis port of Manila, thereby incurring higher freight costs than Thailand, and for 130 mm diameter billet, which has a $2-$3/mt premium to 150 mm billet.

If the Thai buyers decided to proceed with buying the material, they would need to bear any additional costs associated with freight and insurance, as traders would not be willing to share the burden under current circumstances, a Singapore-based trader said.

Marine insurance companies have issued advisories warning shipowners of transiting via the Strait of Hormuz, which may mean charterers would need to bear an additional war risk premium for voyages there. A trader estimated the additional cost to be about $1/mt.

Iranian mills typically export billet on an FOB basis to traders, which then sell on to end-users on a CFR basis. US sanctions on Iranian metals exports mean the material has had to go through the hands of intermediaries, who would amend documents to reflect different origins and load ports.

Other than Thailand, China and Indonesia are other important Asian buyers of Iranian billet.

The last offers of Iranian billet to Indonesia were heard end-December at $415/mt CFR Jakarta. Following the recent flare up in US-Iran relations, the Indonesian government has asked companies to stop imports of Iranian billet, an Indonesian mill source said.

The start-up of PT Dexin Steel Indonesia's steel works has seen it begin to make offers of billet to the domestic market. Dexin's offers for end-February delivery billet were, however, higher than those from Iran at Rupiah 6,300/kg ($450/mt) delivered to Jakarta, excluding goods and services tax.

Buyers in China, who were estimated to have bought some 400,000 mt of billet and slab from the Persian Gulf over July to November, have held back on taking up Iranian offers.

"There is an offer for Iranian billet for March shipment at $425/mt CFR China from other sellers, but we are not participating in this," an eastern China trader said. "More time is needed to see how things pan out. Our ship has sailed out of the Persian Gulf, and we will need to watch the delivery into out other contracts."

Many other major traders and mills in China have said they would rather not take the risk of buying Iranian material even though it may be cheaper, citing the current tensions, existing US sanctions, and the recent downturn in domestic prices of long steel products.

-- Samuel Chin,

-- Analyst Joy Zhuo,

-- Ashima Tyagi,

-- Edited by Daniel Lalor,