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

Iranian billets export market remained less active this week amidst news of sudden power cuts of few mills. No firm deals for exports has been recorded by SteelMint so far.

“Iranian steel mills are yet unclear on power curbs issue. Hence, no firm export offers or tenders have been witnessed this week”, an Iranian source told SteelMint.

SteelMint’s assessment for Iran’s billets export (130*130mm, 3SP) prices stood at around $555-560/t FOB on 25 Jan’22, up by around $2/t, w-o-w.

Domestic billet, rebar prices rise on active buying

Iran’s domestic billet prices rose on active buying soon after the restrictions on billets purchases was removed as mentioned by SteelMint last week. Following the hike in steel billet prices, rebar prices also witnessed a jump, sources informed SteelMint. In addition to it, cold weather has tightened scrap supply and DRI prices may rise on gas shortage.

Domestic billet trade rise on IME

Domestic billet sales on the Iran Mercantile Exchange (IME) rose by 11%, w-o-w. Also, the average sales price increased marginally by 4% on a weekly basis.

Around 120,240 t of billets were traded on IME in the week ending 27 Jan’22 at an average sales price of 128,831 Rial/t. Last week, about 108,690 t of billets were traded on IME at an average price of 124,219 Rial/t.

Power curbs worry Iranian steel mills

Iran’s five steel mills are struggling with the sudden power outages which are likely to impact their production volumes. The Tehran Regional Electricity Organisation has notified the respective steel mills of restrictions on electricity from 22 Jan’22.

The five companies include rolling mills, induction furnaces and pig iron producers. However, the steel majors in Iran haven’t received any such notices yet and the production volumes haven’t been impacted.

The main reason behind the restriction was the lack of liquid fuel (diesel) in power plants in the northern part of the country which has almost reached the critical range. Higher fuel consumption and supply constraints in Northern Iran amid cold weather have forced the government to curtail supplies to steel mills.