Iran, one of the major steel producer in MENA region is currently facing sanctions from US, owing to which the economy of Iran has fallen down. The sanctions affected local currency to such an extent that since last few months, Iranian Rial has been depreciated multiple fold against USD.
Export of steel has fallen down, as per the data released by IMIDRO, Major Iranian steelmakers exported around 3,879,206 MT of steel during first seven months of current Persian year (21 Mar-22 Oct’18). Export decreased by around 3% Y-o-Y. Standalone during the seventh month export was noted to be around 364,215 MT, registered a downfall of 17% Y-o-Y.
Owing to Sanctions, demand for finished long steel has come down which badly affected billet market as well. As per SteelMint assessment, during the beginning of week 46 (10 Nov-15 Nov’18), domestic billet offers were heard to be around IRR 38,440/KG (USD 915.24/MT). Billet offers started declining from 11 Nov’18 by reaching IRR 37,940/KG (USD 903.33/MT) and continued declining since then. Towards the mid of week, offers were noted to be around IRR 37,320 – 37,390/KG (USD 888-890/MT). During the end of week, offers were hovering at around IRR 37,210 – 37,330/KG (USD 885-887/MT).
On parallel lines, domestic rebar offers in Iran has also declined last week. As per SteelMint assessment, during the beginning of last week, rebar offers were noted to be around IRR 44,700/KG (USD 1,064/MT). Offers started declining and reached IRR 44,130/KG (USD 1,051/MT) during the mid of week. Towards the end of last week rebar offers were noted to be around IRR 43,510/KG (USD 1,036/MT).
As per Planner “Billet offers are declining due to lower demand domestically and problem in exports, Recently ESCO sold around 50,000 MT at UD 430-440/MT”
IRSteel quoted,” As ex-rate in open market is declining, DRI and billet price would also continue declining. Besides, long products are also downward.”
| Commodities | 10/11/2018 | 11/11/2018 | 12/11/2018 | 13/11/2018 | 14/11/2018 | 15/11/2018 |
| Scrap | 32,270 | 32,580 | 32,830 | 32,860 | 32,800 | 32,800 |
| Billet | 38,440 | 37,940 | 37,390 | 37,320 | 37,330 | 37,210 |
| Rebar | 44,700 | 44,560 | 44,130 | 44,130 | 43,720 | 43,510 |
| Difference between Scrap-Billet | 6,170 | 5,360 | 4,560 | 4,460 | 4,530 | 4,410 |
| Difference between Billet-Rebar | 6,260 | 6,620 | 6,740 | 6,810 | 6,390 | 6,300 |
Unit: IRR/KG
Source: Planner
Exchange Rate: 1 USD- IRR 42,000
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