Iranian economy is currently facing a lot of hurdles, owing to US Sanctions. Construction sector has faced a backlash from harsh market condition and government policies which has reduced the demand for semi-finished and finished long steel. Lack of finished long steel demand has impacted the domestic billet offers aversely. Iranian billet export offers has also come down dramatically to around USD 400-405/MT FOB Iran.
Recently as per SteelMint sources, Iran’s finished long giant ESCO has closed an export deal of 40,000 MT billet at around USD 400-410/MT FOB Iran.
As per SteelMint’s assessment, domestic billet offers during the beginning of week 49 (1 Dec-6 Dec’18) was noted to be around IRR 33,460/KG (USD 797/MT). Offers continued declining over the next few days and reached IRR 33,110/KG (USD 788/MT). During the mid of week 49, billet offers in domestic market was heard at around IRR 32,910/KG (USD 784/MT). Towards the end of the week, billet offers dropped dramatically by around USD 40/MT. Offers towards the end of week was noted to be around IRR 31,490/KG (USD 747/MT).
According to Planner, “Market is in downward trend, Iranian Rial is strengthening sharply and the demand for the steel is low. Upon that the budget act has undermine infrastructure budget and not enough fund has been allocated for construction. ”
IR Steel quoted, “Nobody was interested in buying and market was in waiting mood. Currency market is quiet and also Chinese and Russian origin billet is being more competitive in the countries which traditionally buy from Iran. Foreign buyers prefer dealing in small tonnage and ready to be delivered cargoes due to nearing Christmas time which is not in line with Iran export market situation.”
| Commodities | 1/12/2018 | 2/12/2018 | 3/12/2018 | 4/12/2018 | 5/12/2018 | 6/12/2018 |
| Scrap | 30,710 | 30,090 | 28,950 | 28,550 | 28,280 | 27,930 |
| Billet | 33,460 | 33,310 | 33,110 | 32,910 | 31,370 | 31,490 |
| Rebar | 40,130 | 39,580 | 39,190 | 38,850 | 38,480 | 38,490 |
| Difference between Scrap-Billet | 2,750 | 3,220 | 4,160 | 4,360 | 3,090 | 3,560 |
| Difference between Billet-Rebar | 6,670 | 6,270 | 6,080 | 5,940 | 7,110 | 7,000 |
Units – IRR/KG
Source: Planner
Major Steelmills Offered Billet in IME
South Kaveh Steel Company offered 10,000 MT and sold 7,000 MT 5SP billet on 02 Dec’18 in IME at IRR 31,780/KG (USD 757/MT) excluding 9% VAT against the demand of 12,000 MT.
Khorasan Steel Company offered and sold 4,000 MT 5SP billet on 05 Dec’18 in IME at IRR 31,786/KG (USD 757/MT) excluding 9% VAT against the demand of 6,000 MT.
Khouzestan Steel Company offered 70,000 MT and sold 10,000 MT 5SP billet on 05 Dec’18 in IME at IRR 31,780/KG (USD 757/MT) excluding 9% VAT against the demand of 10,000 MT.
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