The escalation of the conflict between the United States and Iran has forced shipowners to avoid the Strait of Hormuz, which has created uncertainty with shipping, which has slowed down the spot business for the production of steelmaking raw materials.
Traders from Asia, India and the Middle East said the number of offers had decreased since the weekend, and some suppliers were struggling to secure supplies in April as it became increasingly difficult to confirm a route through the Persian Gulf.
No producer of direct reduction cast iron (DRI) or hot briquetted iron (HBI) in the Persian Gulf has issued a force majeure notice or stopped shipments. It was assumed that they were moving, but traders expect increased transit times and possible delays if carriers continue to avoid the region.
Indian buyers reported that the import of thermal coal from South Africa is carried out as usual, but expect higher costs for the import of ore, scrap and other materials during transportation[url=https://direct.argusmedia.com/newsandanalysis/article/2794951]is rising. According to market participants, some Indian DRI plants that have recently imported Iranian raw materials may also face tougher sanctions checks.
Pellet and iron ore flows passing through the Persian Gulf or the Suez Canal are also at risk of disruptions. Traders said that shipments of raw materials from producers in the Persian Gulf to Europe or North Africa may involve longer flights or higher transportation costs, while pellet buyers from Southeast Asia and the Middle East may also face delays if bypassing of the Strait of Hormuz continues. Manufacturers are expected to continue to meet contractual volumes, but delivery times may increase if conditions persist, market participants say.
In Asia and the Middle East, buyers have mostly suspended new purchases, with participants reporting almost no new orders. Suppliers stated that they did not want to offer goods without available vessels, and buyers refrained from doing so until the freight issue was clarified. "Everything is going on as usual, but no one wants to commit to producing new tons until they decide on the freight," said one of the suppliers.
Pig iron suppliers in the Asia—Pacific region faced difficulties in closing ships as freight brokers suspended negotiations, market participants said. As a result, some buyers may face a shortage of supplies, but at the moment, traders say that the market fundamentals are mostly
