Iran one of the largest exporter of steel market in MENA region is facing sanctions from US, owing to which the domestic billet affected adversely. Last month Ministry of Industry, Mine and Trade restricted the steel prices to soar in Iran mercantile exchange (IME) by putting an upper limit of maximum price.
According to the rule, big steelmakers are required to sell their products to authorized buyers in IME with a fixed price of FOB CIS x IRR 42,000. Also, the steelmakers can raise the price of the product in IME only by 15%. Resulting to which there was a huge difference in the IME prices and actual market prices.
Recently the ministry suspended this rule by removing the upper limit of steel price in IME. According to the letter issued by Deputy Industries Minister Jafar Sarqeini, The prices of steel products on IME from now on are to be equivalent to the average rate of discovery of goods in the last four offers on the market, thus removing the ceiling on commodity trading for steel products.
The discovery of new prices will be in accordance with the proposal made by four major steel companies of Khorasan, Khuzestan, Mobarakeh and Esfahan. It is believed that after this rule the difference between the steel prices on IME and spot market will reduce significantly.
As per SteelMint’s assessment, domestic billet prices was noted to be around IRR 36,750/KG (USD 875/MT) on 1st Sep’18. Prices went to IRR 40,320/KG (USD 960/MT) on 3rd Sep’18 and continued rising till IRR 42,110/KG (USD 1003/MT) on 5th Sep’18. Prices came down slightly to IRR 41,510/KG (USD 988/MT) on 6th Sep’18.
| Commodities | 1/9/2018 | 2/9/2018 | 3/9/2018 | 4/9/2018 | 5/9/2018 | 6/9/2018 |
| Scrap | 24,920 | 25,250 | 25,320 | 25,310 | 26,170 | 26,610 |
| Billet | 36,750 | 38,890 | 40,320 | 41,690 | 42,110 | 41,510 |
| Rebar | 41,760 | 44,060 | 45,720 | 46,500 | 48,030 | 47,700 |
| Difference between Scrap-Billet | 11,830 | 13,640 | 15,000 | 16,380 | 15,940 | 14,900 |
| Difference between Billet-Rebar | 5,010 | 5,170 | 5,400 | 4,810 | 5,920 | 6,190 |
Price in IRR/KG
Source: Planner
KSC, Khorasan Steel and Arfa Steel Traded in IME
Khouzestan Steel Company (KSC), the largest exporter of Steel in Iran has sold 30,000 MT bloom in IME at IRR 23,908/KG (USD 569/MT) against the demand of 129,000 MT. On parallel lines, Khorasan Steel has sold 5000 MT in IME against the demand of 22,000 MT. Arfa Steel has sold 5000 MT in IME against the demand of 28,000 MT.
Inputs taken from Planner & Financial Tribune
Leave a Reply