Iran: Billet export market less active as mills await clarity on power curbs

Iran’s billet exports market remained less active this week amidst news of power cuts at a few mills. No firm deals for exports have been recorded by SteelMint so far.

However, one of the major semi-finished steel exporters from Iran concluded a deal of around 40,000-50,000 tonnes (t) of steel billets at around $560/t FOB for early-August shipment towards the end of last week.

SteelMint’s latest assessment of Iran’s billet export (130*130mm, 3SP) prices stood at $560/t FOB on 7 June 2022, down by around $4/t w-o-w. Notably, prices have hit a six-month low, data maintained with SteelMint shows.

Domestic billet prices rise, rebar stable

Iran’s domestic billet prices saw a sharp rise amid supply concerns and power shortages while rebar prices remained stable. However, rebar prices are likely to go up, sources informed SteelMint.

Domestic billet trade edges down on IME

Domestic billet sales on IME fell marginally by 6% w-o-w. However, the average sales price increased by 4% w-o-w.

Around 84,000 t of billet were traded on the Iran Mercantile Exchange (IME) in the week under review at an average sales price of 146,425 Rial. Last week, about 89,000 t of billets were traded at an average sales price of 140,708 Rial.

Steel mills protest against power restrictions, seek immediate reforms

Electricity restrictions in Iran have come into effect from 6 June 2022 and will continue till September 2022. The government has asked steel mills to reduce their electricity consumption. Given such restrictions, production cuts are expected again that will lead to 5-6 million tonnes (mnt) of production loss, as per reports.

However, according to market sources, mills are protesting against the restrictions and calling for immediate reforms. They said the restrictions should be distributed among all industries so that the country’s steel mills suffer less losses.

Outlook

With the challenges of power supply re-emerging in Iran, the country’s steel production is likely to remain restricted in the near term, affecting billet export allocations.