Iran: Mills float over 100,000 t semis export tenders, bids-offer disparities limit trade

Iranian semi-finished steel export market turned active after remaining silent for a few weeks amidst the news of power cuts. With export tenders of around 130,000 t of billets and slabs lined up by steel mills like Mobarakeh and Khouzestan Steel Company, trade is likely to resume after a pause.

Khouzestan Steel Company (KSC) has floated steel billet and slab export tenders of 40,000-50,000 t each with the due date being 20 June 2022. The shipments are likely to be scheduled for end-August. Another 30,000 t slab export tender is floated by Mobarakeh Steel Company (MSC) with the due date being 17 June and the shipment is scheduled for end-August.

Meanwhile, another Iranian mill cancelled its tender owing to bid-offer disparities. According to market sources, the highest bid received for the tender was around $540/t FOB against steel mill’s expectation of $565/t FOB.

SteelMint’s latest assessment of Iran’s billet export (130*130mm, 3SP) prices stood at $560/t FOB on 14 June 2022, stable, w-o-w.

Domestic billet prices fall, rebar up

Iran’s domestic billet prices fell due to billet orders getting cancelled on the Iran Mercantile Exchange (IME) while rebar prices jumped, sources informed SteelMint.

Billet trade at IME edges down

Domestic billet sales on IME fell marginally by 4% w-o-w. However, the average sales price remained largely stable w-o-w.

Around 80,600 t of billets were traded on IME in the week under review at an average sales price of 148,445 Rial. Last week, about 84,000 t of billets were traded at an average sales price of 146,425 Rial.

Govt eases power restrictions to support steel mills

Electricity restrictions in Iran came into effect from 6 June 2022. As reported earlier by SteelMint, mills protested against the restrictions and called for immediate reform. In the latest update, with the approval of the Ministry of Energy, power restrictions have been eased in the country and steel mills will be supplied electricity from 11 pm to 8 am without any restrictions.

Outlook

Amid power supply restrictions, Iran’s steel production is likely to remain restricted in the near term, affecting billet export allocations. However, the ease in restrictions announced recently may become a deciding factor for the export market.