It is reported that steel billet prices in the Black Sea have fallen this week as Iranian purchases have slowed, while demand from Europe and the Middle East has not been strong enough to support prices.
Traders quoted Black Sea FOB billet at around USD 520 a tonne compared with USD 530 per tonne to USD 540 a tonne last week. While the price of scrap, a key ingredient in the making of billet, dropped to levels below USD 380 per tonne from USD 385 a tonne in Turkey.
On the London Metal Exchange, the three month billet contract FMD3=LX was last traded at USD 459 per tonne as compared with USD 460 per tonne.
A UK based steel trader said that "Basically the market's run out of interest. Iranian demand was holding up the market and now they've had enough and there's no demand elsewhere for billet.”
The trader said that "If you suddenly dump double the amount that they normally purchase, that demand would not stay high for a long period of time.”
Iran had emerged as a major buyer of Turkish and Russian steel in early September, and traders estimated it had bought 600,000 tonnes to 800,000 tonnes of billet, more than double its usual monthly purchases. But over the past 10 days, Iranian purchases have waned.
Industry sources said that scarcity of financing for deals with Iran as US led sanctions scare off its usual trading partners is another difficulty in trade with the Islamic Republic.