Iran, one of the largest steel manufacturer and exporter is set to face US sanctions. It was expected that Iran might decrease its production but based on the primary talks with major steelmakers Iran is nowhere close to reducing the production of steel. Iran however might look for new export destination over the period of time but the biggest hindrance in export is fluctuating exchange rates. The government has the exchange rate of 1 USD at IRR 42,000 but in free market a dollar is exchanged at IRR 80,000 to 85,000.
Recently as per sources, Iranian government is going to bring another exchange rate on which the sellers can sell their currencies based on that. If this happened, then it might bring down the export realization which might hamper exports also. It might affect domestic prices as the market confidence is low.
1 – During the beginning of Week 26 of Persian year (23-Jun till 27-Jun’18) domestic billet was traded at around IRR 29,550/KG (USD 491/MT) considering the exchange rate as IRR 42,770.
2 – Prices jumped to IRR 30,610/KG (USD 716/MT) on Sunday and reached to IRR 30,760 (USD 719/MT) during mid of week.
3 – During the weekend domestic billet prices was noted to be around IRR 30,230-670 (USD 707-717/MT)
As per Planner “Market is quite and the liquidity has been low. The dollar has been stable and is expected to lower if a second rate is introduced. Also, if this act really gets in the way, then export will be hit.”
| Commodities | 23/6/2018 | 24/6/2018 | 25/6/2018 | 26/6/2018 | 27/6/2018 |
| Scrap | 20,420 | 20,750 | 20,970 | 21,210 | 21,430 |
| Billet | 29,550 | 30,610 | 30,760 | 30,670 | 30,230 |
| Rebar | 32,860 | 33,940 | 34,640 | 35,040 | 34,980 |
| Difference between Scrap-Billet | 9,130 | 9,860 | 9,790 | 9,460 | 8,800 |
| Difference between Billet-Rebar | 3,310 | 3,330 | 3,880 | 4,370 | 4,750 |
Quantity in IRR/KG
Source: Planner
Khouzestan Steel Sold 30,000 MT Bloom at Iran Mercantile Exchange
Khouzestan Steel also known as KSC has sold 30,000 MT Bloom 5SP against the initial offering of 10,000 MT on 24-Jun’18 for Aug’18 end delivery. The company has reportedly sold the bloom for IRR 25,740/KG. As per reports the demand was for 168,600 MT however the decided to sell 30,000 MT.
KSC Issues Tender for 70,000 MT Billet & Slab
Khouzestan Steel Company (KSC) – Iran’s largest steel exporter has invited tender for export of 30,000 MT billet and 40,000 MT slab for mid Sep’18 and Aug’18 shipment respectively.
The due date for bid submission is 06 Jul’18 till 18:00 hrs.
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