Following the acceleration of buying interest in China during the past two weeks,Iran-basedbilletexporters have not taken long to adjust their offers upwards. Moreover, in each new booking the sellers have managed to achieve a higher price. However, since the beginning of July, trading has been significantly hampered by electricity shortage in the country. Specifically, following the continuing power shortages,Iran’s Power Generation and Distribution Company, Tavanir, has ordered steel and cement mills to reduce their electricity consumption by 10 percent, effective from July 6, to avoid a total blackout. “Limiting the usage of electricity is serious indeed. I visited a steel mill with two EAFs having been turned off, and only rolling lines working to produce bars from available billets,” anIran-based trader commented with regard to abovementioned developments. “The recent restrictions on electricity usage have made our decisions towards doing business increasingly difficult,” the representative ofIran-basedbilletmill stated.
Accordingly, at the beginning of last week, one tender for 30,000 mt of ex-Iransteelbilletwas closed at $620/mt FOB BIK, for August shipment. The prices achieved in the subsequent tenders have been significantly higher. Specifically, following the successful sale ofbilletat $643/mt FOB in the middle of the given week, one keyIran-based exporter has closed its next tender already at $652/mt FOB. The freight rate to China which had been estimated earlier at around $55/mt might have risen lately due to a shortage of vessels in the market, according to one Iranianbilletexporter.
Meanwhile, the most recent sales of ex-Iranbilletin China from traders have been heard at $690-695/mt CFR last week.