Higher Freight Rates, Lack of Vessels Dent Steel Imports

EghtesadOnline: The flat steel import market in Iran continued to be influenced by an unprecedented increase in freight rates sparked by a massive rise in grain shipments to the country.

News ID: ۷۸۰۳۴۹

11 November 2017

Normally, when the autumn season for grain exports arrives, the cost of freight from the Russian port of Astrakhan to Iran increases by $3-5 per ton from the normal rate of $20 per ton, while the cost from Kazakhstan’s Aktau Port rises to $17-18 per ton, compared with the usual $15 per ton.

However, this year, the rise in freight costs reached unprecedented levels, as Iran’s grain imports have soared due to a “bad harvest” in the country, sources told Metal Bulletin.

Since mid-October, freight costs for flat steel products from Astrakhan have risen to $47-55 per ton, while shipping costs from Aktau rose to around $30 per ton, Financial Tribune reported.

The reduced availability of vessels has added to the difficulties experienced by steel shippers.

“We have a big problem with vessels now, but hopefully it will be solved by the end of November,” a source on the selling side said.

Metal Bulletin’s price assessment for imported 2-mm hot-rolled coil in Iran was $565-575 per ton CFR Iranian ports on Nov. 9, compared with $573-580 per ton CFR a week earlier.

Several cargoes of Kazakhstan-origin HRC for December shipment, totaling 20,000 tons, were booked by traders for Iran at $535 per ton FOB Aktau, or $575 per ton CFR in the Iranian northern port of Anzali.

Official offers from Russia’s Magnitogorsk Iron & Steel Works were unchanged week-on-week at €460 ($533) per ton FOB Astrakhan, or $580-588 per ton CFR Anzali.

However, this price was considered too high by customers in Iran, with bids coming at around €440 per ton FOB Astrakhan. According to some sources, this price would be possible to achieve now.

The price assessment for imported 0.50-1.25 mm CRC in Iran widened to $600-626 per ton CFR Iranian ports on Wednesday, against $510-630 per ton a week earlier.

Kazakhstan-origin material was reported available for foreign customers at $570 per ton FOB Aktau, or $600 per ton CFR Anzali, down $25 per ton week-on-week.

The shrinking of the margin between CRC and HRC prices was explained by reduced interest in downstream steel products.

Offers of Russian CRC remained unchanged at €500 per ton FOB Astrakhan, which would be equivalent to $626-634 per ton CFR Anzali.