The Middle East and North Africa billet market is under pressure from subdued markets in the Far East, mainly traditional Iranian billet buyer China. Since demand is low for MENA-origin rebar in Hong Kong and Singapore, and for billet in China, the only viable market for Iranian and Gulf Cooperation Council billet is the GCC.

However, before the Eid Holiday this week, two local re-rollers in United Arab Emirates concluded 150mm 3sp electric arc furnace billet deals each for 20,000 tonnes from an unconventional billet supplier at $585/tonne ex-works. These were on a letter-of-credit at sight basis for July deliveries. The transactions have given billet prices a downward direction this week, Kallanish understands.

This week, Omani electric arc furnace billet producers are targeting $590/t ex-works for July shipment, $10/t lower than last week. UAE induction furnace billet prices are meanwhile at $585-590/t ex-works, or delivered for nearby destinations. However, demand is dull. 

Oman’s Jindal Shadeed will perform a maintenance shutdown from 18 July until the end of the month, while Modern Steel has postponed its maintenance work to the beginning of August due to technical issues. 

"Taking into consideration the benchmark mill's July-delivery rebar price at $685/t, billet deals at $585/t ex-works are slightly lower than the $600/t ex-works target prices of merchant billet producers and integrated mills," comments a senior UAE mill official.

This week in Iran, billet tenders by Sirjan Jahan Steel Company (Sisco) and Esfahan Steel Company (Esco) for 30,000t each were heard concluded at $500/t fob and $520/t fob Iran, respectively.

Following the concluded tenders, two export deals have been reported at $510/t fob for a 30,000t cargo destined to Oman and at $517/t fob for a 5,000t cargo destined to another Persian Gulf Country. These are both for late-August delivery.

"The sentiment is negative in China. This impacts negatively Iranian semis export prices,” explains a market insider. “Although Russian billet prices have increased on an fob basis by $60-70/t to $600-610/t, we don't observe this being reflected in Iranian material. Another factor is the Iranian domestic market is slow, which does not help to elevate prices."