Iran’s steel billet export market witnessed limited trading this week amidst news of the Iranian government introducing new policies.
Additionally, as per reports, the country’s Basic Goods Market Management Working Group of the Ministry of Security has mandated the manufacturers of all steel products to offer their entire production on the commodity exchange by the end of May of the next Persian year, which is seen as a serious blow to the steel export market.
Lesser number of firm offers currently in the export market and power curbs due to harsh winter in the region have also weighed on trade activities. However, an Iranian steel mill has concluded an export deal for 10,000 t of billets at around $557/t FOB.
Meanwhile, Esfahan Steel Company (ESCO) had floated an export tender for 30,000 t of steel billets. The shipments are likely to be delivered in April.
“We are hopeful of getting bids of more than $570/t FOB in the ongoing billet tender,” said a mill source.
SteelMint’s latest assessment of Iran’s billet (3SP) export prices stood at around $560/t FOB on 28 February, a marginal increase of $2/t, w-o-w.
Billet exports up in Mar’22-Feb’23
Iran’s billet and bloom exports in the first 11 months of the current Persian year (March 2022-February 2023) registered an 11% increase y-o-y to 5.12 mnt, according to data from Petrometals.
Domestic billet, rebar prices fall sharply
Steel billet and rebar prices continued to head north until last week amid inflationary pressures and an uptrend in the exchange rate.
However, the cancellation of recent billet transactions on the Iran Mercantile Exchange (IME) by Iranian authorities led to fresh supplies of billets, leading to a decrease in domestic prices.
Domestic trade on IME rises w-o-w
Domestic billet sales on the IME saw an increase of 25% w-o-w. Meanwhile, the average sales price increased slightly by 1% w-o-w.
Around 191,000 t of billets were traded on the IME in the week under review at an average sales price of 206,195 Rial. Last week, about 153,000 t of billets were traded at an average sales price of 203,674 Rial.
Outlook
Iran’s semi-finished steel export prices are expected to remain supported because of limited offers in the market with billet exporters turning towards the domestic market. Moreover, the country is facing a severe energy shortage and the government’s recent announcements on controlling inflation and increasing exchange rates are likely to affect billet export allocations.
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