Economy, Business And Markets

New MSC Tender Unlikely to Lure European Buyers

Market players believe MSC’s new HRC prices are unlikely to tempt Europeans.Market players believe MSC’s new HRC prices are unlikely to tempt Europeans.

Mobarakeh Steel Company, the largest flat steel producer in Iran, has launched a new round of hot-rolled coil export sales.

The producer has set higher initial prices for Europe, given limited supply. Potential buyers doubt that this strategy will succeed, as they find the new price level just as a formal announcement of presence in the market, according to Metal Expert–a Ukraine-based provider of news and analysis on steel products and steelmaking raw material industries.

MSC is quoting flats to Europe at €430/t ($480/t) FOB southern ports, compared to €375-380/t ($415-420/t) FOB southern ports in early September. The gap is explained by extremely low availability of export material.

“We have almost nothing to offer abroad for being mostly focused on the domestic market,” a company representative told Metal Expert.

Market players believe the new prices are unlikely to be accepted in Europe.

“I agree that Iran had to open trading at higher prices. However, I actually do not see opportunities for any business if the price is above €420-425/t CFR. An interest in Iranian HRC can arise only if the supplier gives discounts,” a trader told Metal Expert.

The released price level indicates that the supplier is just nominally in the market, as it is either uninterested in actual export sales or has nothing to sell, especially in Europe, according to Metal Expert estimations.

Besides, sales are restrained by the anticipated release of preliminary determination of anti-dumping investigation against HRC imports to the European Union in November. As booked tonnages may fail to arrive to a buyer before this date, buying Iranian steel becomes risky in terms of probable additional expenses.

Iran is among a number of countries the EU has threatened to hit with tariffs to check their export of hot-rolled flat iron and alloy and non-alloy steel products. The other countries named in the list include Russia, Ukraine, Serbia and Brazil.

The European Steel Association, whose members account for more than a quarter of EU iron and steel products, triggered the case in a May complaint. The European Commission’s probe is set to focus on July 1, 2015, to June 30, 2016.

The HRC market in Europe is worth about $11.1 billion. The key product is used in everything from cars to construction and is a monopoly of such companies as ArcelorMittal and ThyssenKrupp.


Add new comment

Read our comment policy before posting your viewpoints