Iran: Billets export prices remain supported, trades on IME rise sharply

Iran’s billets export prices remained supported this week despite low volume of trading. SteelMint’s latest assessment of Iran’s billet (3SP) export prices stood at $680/t FOB on 15 Mar’22, up $3/tonne (t), w-o-w.

Iran’s leading steel mill KSC floated 40,000 t each of steel billets and slab export tenders. As per sources, the slab export deal was concluded at around $700-710/t on FOB basis for end-April shipment, while the billet deal had still not been concluded till the time of publishing this report.

Domestic billet trade on IME up sharply

Domestic billet sales on the Iran Mercantile Exchange (IME) increased by 40%, and the average price was also up around 9% w-o-w.

Around 131,700 t of billets were traded on IME in the week under review at an average sales price of 146,007 Rial. Last week, about 94,150 t of billets were traded on IME at an average sales price of 133,899 Rial.

Iran may impose export duties on steel 

The Iranian government is planning to limit exports of steel and some raw materials in the near future to avoid possible shortage in the domestic market, according to market sources. The undersupplied global steel market is now driven by the need to fulfill the absence of supplies from the CIS. In such a scenario, Iran is turning towards stricter controls to maintain domestic supplies.

Iran’s Ministry of Industry has already stated that export duties will be imposed soon on steel billets, slabs, direct reduced iron (DRI), pellets and iron ore concentrates, with the aim to regulate the market, particularly to avoid disbalance between local and overseas supplies. Also, the corporate tax exemption on these products will be lifted, as per reports.

In case the decision is finalised, the export duties are expected to be implemented by the beginning of the next Persian year, i.e., 21 Mar’22. However, sources are still awaiting clarity on this amidst the upcoming Persian New Year holidays, which is expected to keep the market inactive.

Iran’s finished steel exports in the first 11 months of the current Persian Year (Mar’21-Feb’22) stood at 3 million tonnes (mnt), registering a significant 14% increase compared to the same period last year, as per data from the Iranian Steel Producers Association (ISPA).