Iranian billet export prices witnessed a drop for the second consecutive week amid falling global scrap prices. However, no deals were concluded at the revised offerings. Due to the upcoming Chinese New-Year holidays, buyers are in a wait-and-watch mode, anticipating prices to drop further.
“Demand in exports is weak considering the downtrend in global scrap prices and upcoming Chinese New Year holidays. Not many traders or buyers are active in the market currently. However, few Iranian mills were heard offering billet (150*150mm) at $520/t FoB levels for Mar’21 shipments”, shared a participant from a leading Iranian mill.
SteelMint’s billet export price assessment stands at $520-525/t FoB, lower by $10-15 w-o-w.
On the other hand, the domestic billet demand witnessed a revival, as like the previous week, the IME prices were a function of 75% of the CIS prices (generally, it is 80% of the CIS price). The Iranian Government did this to encourage buying and to raise the demand. However, marketers believe that price reduction would encourage buying but it not be correct to say that demand is rising. There is a high likeliness that buyers might have over-stocked the material amid reduced prices, SteelMint learned during conversations with Iranian market participants.
However, mills would still prefer the export market over the domestic, because of better price realizations. For instance, offers from the few leading Iranian mills were at $520-525/t, FoB. While in a recent trade event hosted by the Iranian Mercantile Exchange (IME), approximately 95,000 t billets reported were traded at an average price of IRR 104,984/kg (~$430/t), up by IRR 3,223/kg ($13/t). Even though the prices witnessed a sharp w-o-w rise at the IME, the spread between domestic and export offerings continued to be very high.
Meanwhile, the Iranian Steel Producers Association (ISPA) released a report on the Iranian steel industry, which says- Steel production has gone up by 11%, and exports dropped by 17% during the first 9M of the current Iranian year. Mobarakeh Steel Company (MSC) remained the largest steel producer, while KSC emerged as the largest exporter during the period under consideration.
Iran’s production and export figures during 20 Mar-20 Dec ’20
Production and Export figures of Iran’s major steel producers during 20 Mar-20 Dec ‘20
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