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| Middle Eastern Steel |
Strait of Hormuz Escalation Raises Costs
The Persian Gulf conflict is expected to disrupt global steel supply chains immediately. Meanwhile, military tensions between the US and Iran threaten shipments through the Strait of Hormuz. As a result, energy-intensive production costs and freight rates are rising sharply. Insurance premiums for regional transit are also surging. Traders report that most shipowners now avoid the strait, creating direct pressure on Middle Eastern steel exports and logistics.
Iran’s Semi-Finished Steel Market Impact
Iran’s suspension of billet and slab exports poses serious challenges to global semi-finished steel trade. In 2024, Iranian exports averaged 250,000 tonnes per month. Consequently, Indonesian slab prices rose by $5/t and HRC by $10/t today. Chinese suppliers report freight costs increasing by 15-20% for Turkey shipments. Therefore, buyers and traders are reassessing supply routes and preparing for short-term market volatility.
GCC Ports and EU Trade Risks
GCC ports, including Jebel Ali and Dammam, are facing operational disruptions due to halted shipping. Furthermore, EU-bound Saudi HRC and UAE HDG shipments are at risk, threatening planned imports. Traders highlight potential quota implications under new EU safeguard mechanisms. Meanwhile, carriers suspended new freight offers to the Middle East, effectively pausing trade. As a result, both supply reliability and market pricing face immediate pressure.
ScrapInsight Commentary
The Persian Gulf conflict sharply raises global steel production and logistics costs. Semi-finished supply from Iran is uncertain, while GCC exports to the EU face potential delays. Strategic sourcing and freight risk management are now critical for steel traders and mills.
