Iranian billet export market gained momentum after remaining silent last week. Steel mills like ESCO, SISCO and SJSCO floated around 80,000 tonnes (t) of billet export tenders this week. With this, trade is likely to resume after a short pause.
Active billet export tenders:
SteelMint’s latest assessment of Iran’s billet (3SP) export prices stood at around $500/t FOB on 5 July, down marginally by around $6/t, w-o-w.
Domestic billet, rebar prices head south
Domestic billet and rebar prices saw a significant fall due to the recession in the market. However, with falling base prices at Iran Mercantile Exchange (IME) and improved buying interest, prices may see an upward correction, sources informed SteelMint.
Domestic billet trade at IME falls w-o-w
Domestic billet sales on Iran Mercantile Exchange (IME) fell by 16% w-o-w. Meanwhile, the average sales price increased marginally by 2% w-o-w.
Around 77, 820 t of billets were traded on IME in the week under review at an average sales price of 137,272 Rial. Last week, about 92,800 t of billets were traded at an average sales price of 134,996 Rial.
Govt further eases power restrictions to support steel mills
Electricity restrictions in Iran came into effect from 6 June 2022. In the latest update, the Ministry of Energy has promised steel mills that the maximum amount of restrictions on the electricity supply imposed for the three-month period would be now 30% as against 50% previously. Meanwhile, the steel association has requested that the activities of the steel mills – to be carried out from 11 pm to 9 am – should remain unrestricted until the end of the summer.
Outlook
Amid power supply restrictions, Iran’s steel production is likely to remain restricted in the near term, affecting billet export allocations by steel mills. However, the further ease in restrictions may become a deciding factor for the export market. Also, with a recovery in global scrap prices, billet export prices may see some upward correction in the near term.
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