Following global trends, Iranian billet export offers continue rising for this week as well. The uptick in global scrap prices pulled up the export offers to $570-575/t, FoB Iran levels. However, we haven’t witnessed any deal at the increased price levels. During conversations with a few leading steel exporters, we learned that they are targeting similar price levels in their upcoming tenders which are likely to be floated by the next week.
SteelMint’s bi-weekly assessment for Iranian billet is $565-570/t, FoB, up by $15-20 against last week.
SteelMint Analysis
Our analysis also attributes the price hike to the ongoing conflicts between the Iranian government and steelmakers on IME price policy. According to our reliable sources, the Industry Ministry of Iran has recently announced a policy which mentions that steel products have to be sold at prices equivalent to 70% in the Commonwealth of Independent States (CIS) markets at the Iran Mercantile Exchange. Currently, the domestic market prices at IME are a function of 80% of the CIS price.
Economists believe that such policies will always profit the middlemen and is likely to hurt the mills, end-consumers, and investors.
However, steel mills have no clarity about how this policy will impact the Iranian domestic and steel export market dynamics, SteelMint learned during a conversation with a few leading mills.
The new price policy negatively hit this week’s IME billet trades: The trade volumes have plunged by around 72,000 t w-o-w. However, the prices have surged further by IRR 5,393/kg ($25/t). According to SteelMint sources, approximately 60,000 t billets were traded at IRR 117,168/kg ($464/t) against the offered quantity of 133,596 t.
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