Shipping insecurity has turned insurance and freight costs into a fresh variable in the competitiveness of Iran’s steel exports
Steel World Review Digest – Market Analysis | September 10, 2026
The intensification of military tensions in the Strait of Hormuz in recent days has further complicated the equation of Iran’s steel exports. Now, alongside product pricing, energy constraints and financial sanctions, the cost and availability of maritime transport can also affect the competitive standing of Iranian steel in export markets.
The latest ship-tracking data points to a noticeable decline in commercial traffic through the Strait of Hormuz. On September 9, only seven cargo-carrying vessels passed through this waterway, compared with an average of about 14 vessels per day over the preceding 10 days. Among the transiting vessels were dry bulk carriers—part of the commercial fleet that plays an important role in transporting minerals and steel cargoes.
This decline in traffic has occurred as attacks on commercial vessels in the region have intensified. On Wednesday, Iran announced that, in response to a U.S. attack on five Iranian tankers, it had targeted 10 vessels in the Hormuz area. At the same time, Iranian officials have warned of further responses should the attacks continue.
It’s not just about the strait’s closure
For the steel trade, the main risk is not necessarily the complete closure of the Strait of Hormuz. Nor does the continued passage of ships mean that trade is proceeding normally.
Higher war-risk insurance premiums, increased fuel costs, the possibility of delays in ships’ arrival and departure, and—more importantly—the reduced willingness of some shipowners to accept Iran-related cargoes, can all raise the cost of exports, even if the ports remain operational.
The surge in energy prices has added to this pressure. On September 10, Brent crude rose by about 5 percent to pass $106 per barrel. Continued high oil prices could raise ships’ fuel costs and put further pressure on freight rates.
For Iranian steel, this shift carries particular significance. In export markets, a difference of a few tens of dollars per ton can shift the outcome of competition among suppliers of billet, slab and other steel products. As a result, even if the FOB price of Iranian steel remains unchanged, higher freight, insurance and risk-related costs can raise the landed cost of a shipment at its destination.
In this way, the Iranian producer’s price advantage may erode along the route to the customer, without any increase in the selling price at origin.
Pressure on southern export routes
Continued maritime insecurity has also placed greater pressure on Iran’s southern ports. Recent reports point to a decline in commercial and port activity in the region—a situation that, if the crisis persists, could make planning for the loading and delivery of export shipments more difficult.
These conditions confront steel exporters with a difficult equation. If shipping costs rise for the buyer, the Iranian seller may be forced to offer a larger discount on the FOB price to keep the shipment attractive. Otherwise, the final price at the destination rises, and Iranian steel’s competitiveness against other suppliers declines.
Therefore, the effect of the Hormuz crisis will not necessarily be seen as a rise in steel prices at origin. One of the more significant consequences could instead be a widening gap between the export price at Iranian ports and the final cost of delivering the shipment to the foreign buyer.
Chabahar: a route gaining greater importance
Under these conditions, Chabahar’s geographic position is receiving more attention than before. Unlike Bandar Abbas and ports inside the Persian Gulf, ships departing from Chabahar for open waters do not need to pass through the Strait of Hormuz.
Under normal circumstances, this difference is a geographic advantage, but during a period of heightened insecurity in Hormuz, it could become more important in the choice of export route.
A sign of this capacity can also be seen in recent tenders. In one export tender in late August, 25,000 tons of billet were offered for FOB delivery at Bandar Abbas, and 10,000 tons for FOB delivery at Chabahar.
Even so, Chabahar is not a cost-free solution. The distance of the main steel production centers from this port, the capacity of transport infrastructure, and the cost of overland transfer of cargo are among the factors that must be factored into calculations. In addition, Chabahar is not entirely immune to the broader risks arising from regional instability.
Transportation: a new pressure on steel exports
Even before the current crisis, Iran’s steel industry was already facing energy constraints, financial sanctions and difficulties in transferring funds. Rising maritime transport risk could place additional pressure on the industry’s exports.
Before the recent escalation of tensions, market reports in late June put Supramax shipping rates from Iran to China at around $36 to $38 per ton. Even at that point, there were reports of limited willingness among shipowners to accept cargo from Bandar Imam Khomeini.
For the current situation, there is not yet a fresh and reliable rate on which to precisely calculate the extent of the increase in Iranian steel shipping costs. Nevertheless, the decline in ship traffic, rising insurance risks and increasing energy prices have all added to the cost and complexity of maritime shipping.
If this situation continues, one of the most significant effects of the crisis on Iranian steel may be seen not in production lines, but along the route between the factory and the foreign customer.
For years, the Strait of Hormuz has mainly been viewed through the lens of energy security and oil trade; but recent developments show that disruption along this route can also directly become an issue of competitiveness for Iran’s steel exports.
