Steel Markets Brace for Gulf Conflict Disruptions

Steel Markets Brace for Gulf Conflict as Supply Risks Rise

Steel markets brace for Gulf conflict as tensions between the US and Iran intensify. The Strait of Hormuz, a critical shipping chokepoint, faces potential disruption, threatening Middle Eastern steel supply. Rising energy costs and insurance premiums are pushing production and logistics expenses higher.

Shipowners are already avoiding the strait, raising freight rates and delaying deliveries. Crude oil futures surged 13% following the escalation, further inflating energy-intensive steel production costs. Traders in Asia and the Middle East are adopting a cautious approach, assessing risks for shipments en route.

Iran’s semi-finished steel exports are at risk. The country shipped approximately 250,000 tons of billets and slabs per month in 2024. Indonesian and Chinese producers have already adjusted slab and HRC prices in response to supply uncertainties. Freight costs for shipments to Turkey and other destinations have risen 15-20%, affecting global price dynamics.

GCC Steel Supply and EU Trade Implications

The Gulf Cooperation Council (GCC) has become a key outlet for Chinese and Asian suppliers. Recent port disruptions at Jebel Ali, Salalah, and Dammam are delaying shipments, while carriers have suspended new Middle East offers. Traders in the GCC warn that closure of the Strait of Hormuz could trigger force majeure claims.

The conflict threatens EU-bound shipments of Saudi hot-rolled coil (HRC) and UAE hot-dipped galvanized (HDG) steel. Exempt from EU steel safeguards, these materials previously supported significant imports: roughly 165,000 tons of Saudi HRC and 130,000 tons of UAE HDG in late 2025. Logistical delays could disrupt quotas and the supply chain before new safeguard mechanisms take effect in July 2026.

Meanwhile, traders are monitoring Red Sea routes for broader escalation risks. Any disruption could delay materials scheduled for EU delivery, complicating downstream steel product availability. Mills and importers are adopting a “wait-and-see” approach as the conflict evolves.

SuperMetalPrice Commentary:

Steel markets are entering a volatile period as Gulf conflict risks tighten global supply chains. Freight delays, insurance spikes, and semi-finished export disruptions are likely to push prices higher. EU importers face potential quota and timing challenges, while GCC suppliers navigate operational uncertainty. Strategic buyers and mills must closely monitor shipping routes and energy costs to mitigate exposure during this period of geopolitical tension.