Iran: Billets export prices fall to 8-month low on bid-offer disparities, natural gas curbs

The Iranian billets export market has continued to remain lackluster this week, as bid prices have declined further amid lack of firm enquiries.

An Iranian mill has reportedly floated a tender for 20,000 tonnes (t) of billets. However, the tender remained inconclusive as the bids fell to around $540/t on FOB basis, as per market sources.

SteelMint’s latest assessment of Iranian billets (3 SP) decreased by around $5/t w-o-w to $565/t FOB on 07 Dec’21, thereby touching an eight-month low level.

KSC floats 80,000 t of billets, slab export tenders

Khouzestan Steel Company (KSC) has floated export tenders for 40,000 t each of steel billets and slab. The shipment is likely to be scheduled for mid-Feb’22.

As per SteelMint data, KSC’s previous export tenders for billets and slab were concluded at $588/t FOB and $565/t FOB respectively in end-Nov’21.

Domestic billet trade regains momentum on IME

Domestic billet sales on the Iran Mercantile Exchange (IME) increased by almost four-folds, along with a 2% w-o-w decline in the average price.

Around 151,300 t of billets were traded on IME in the past week at an average sales price of 128,662 Rial. Contrastingly, only about 41,260 t of billets were traded on IME at an average sales price of 130,629 Rial in the previous week.

Mills face natural gas curtailment issues

Iranian steel mills are presently struggling with governmental restrictions regarding curtailment of natural gas usage, which has already began impacting steel production volumes.

The National Iranian Gas Company has recently notified the steel mills about restrictions on natural gas supply during the ongoing winter season.

Chinese rebar futures drop further

The Chinese rebar futures contract for May’22 delivery on the Shanghai Futures Exchange closed at RMB 4,293/t ($676/t), down by RMB 57/t ($9/t) on 9 Dec’21, according to SteelMint data.

Outlook

Iranian billets and slab export prices are not likely to witness any sharp correction in the short term owing to the ongoing gas supply crisis which might impact production levels.