Gulf Cooperation Council integrated mills are eyeing export markets amid increasing scrap prices and a shortage of Iranian billet supply, Kallanish observes.

Last week, direct reduced iron-route long steel producers concluded two standard billet deals with a trading company aiming to offer the material to North Africa.

Kallanish learns from market sources that integrated mills in Qatar and Bahrain concluded the deals for March and April shipments, each for 30,000 tonnes at $590/tonne and $585/t respectively, on a fob basis.

This week, GCC electric arc furnace mills are targeting at and above $610/t fob for March readiness. 

"Chinese buyers' billet bids are at $600/t cfr China, whilst Indonesian mills are targeting $620/t fob. The best billet supply option is the GCC region, where all large producers operate their own direct reduced iron modules,” observes a senior trading company official.

"Current iron ore price and pellet premium enable DRI route steelmakers to enjoy better margins. Turkiye, where most longs producers use scrap as raw material, has higher costs. Energy costs were reduced in Turkey effective from 1 February, but in response, scrap traders increased their quotes during their last round of sales to Turkish buyers,” he adds.