Iran: Billet, rebar prices climb up as traders increase stockpiling

• Potential production cuts encourage inventory building
• Weaker rial, pellet premiums raise steel price expectations

Iranian billet prices increased by 20,500 rial/kg ($12/t) w-o-w to 849,000 rial/kg ($491/t), while rebar prices rose by 35,000 rial/kg ($20/t) to 985,000 rial/kg ($570/t). The increase was driven by higher inflation expectations, supply constraints, and active stockpiling by traders.

The Central Bank’s foreign-currency conversion rate was revised higher, leading to a weaker rial, adding to inflationary pressure across the steel value chain. Meanwhile, expectations of a $20/t increase in pellet premiums raised concerns over higher production costs.

Tighter supply through the exchange encouraged traders to increase purchases and build inventories amid expectations of further currency depreciation and potentially lower production in the coming months. Uncertainty surrounding negotiations with the US also supported precautionary buying.

However, underlying steel consumption remained weak, indicating that the recent price gains were largely driven by inflationary and supply-side pressures rather than stronger end-user demand.