Iran: Billet export prices hit two-year high in recent deals

This week, the Iranian billet export market reported having booked sizeable billet volumes for China, the Persian Gulf, and SE Asian destinations. The prices are at a two-year high.

Global scrap prices and continuous rising futures pulled the Iranian billet export prices: In the past one week, the imported scrap prices in Turkey jumped by $20-25 to reach $330/t CFR, as of 19 Nov’20. It has likely increased global billet prices. The price hike also was strongly backed by continuous rising Chinese SHFE rebar futures, which reported an increase of RMB 108 ($16) this week and today settled at RMB 3,940/t ($598/t).

Deals:

• KSC concludes 30,000 t billet export tender: Khouzestan Steel Company (KSC), the leading steel exporter of Iran, reported having booked 30,000 t billets through a tender at $435-440/t, FoB Iran. The shipment is scheduled for Dec’20, with China, SE Asia, and the Persian Gulf to be likely destinations.
• We have also heard ESCO and Sirjan Iranian Steel Company booking sizeable volumes for Chinese and a SE Asian destination at $430/t and 427/t, on a FoB Iran basis. However, we could not confirm the quantity until the publishing time of this report.

SteelMint assessed Iranian billet export offers to be at $435/t, FoB Iran, up by $15 against last week.

Steel exports drop in 7M of current Persian year- Iranian steel exports during the first seven months of the current Iranian Year (20 Mar-20 Oct’20) stood at 4.53 mn t, registering a y-o-y decline of 23.5%. The semi-finished steel exports recorded at 3.19 mn t, down by 16% y-o-y, while finished steel exports have seen at 1.34 mn t, down by 37% y-o-y.

Domestic billet prices at IME drop by IRR 4,394/kg ($17): This week, amid sluggish demand, Iranian domestic billet prices saw a fall of IRR 4,394/kg ($17) in a recent trade event hosted by the Iranian Mercantile Exchange (IME). According to SteelMint sources, approximately 46,250 t billets traded at an average price of IRR 93,395/kg ($369/t).

Meanwhile, the semi-finished steel production of major Iranian steel mills stood over 13 mn t (up by 8% y-o-y) during the first seven months of the current Iranian Year (20 Mar- 20 Oct’20). And finished steel production recorded a growth of 4% y-o-y to reach 8.43 mn t. Financial Tribune reported.