Iran: Billet export market remains largely quiet, prices drop further in recent deal

Iran's billet export market remained less active this week with prices falling further in recently concluded deals. Declining global prices, low bids, limited trade and cheaper billet offers from Russia continue to weigh on billet export prices, SteelMint notes.

An Iranian mill concluded an export deal for 30,000 tonnes (t) of billet at around $515-520/t FOB Iran for August shipment. Iran's billet export prices have corrected by $12/t as against the last-concluded tender last week.

SteelMint's latest assessment of Iran's billet (3SP) export prices stood at around $518/t FOB on 28 June, down by $15/t, w-o-w.

Billet export, production up in Mar-May'22

Iran's billet and bloom exports in the first two months of the current Persian year (March-May, 2022) registered a significant 29% increase y-o-y to reach 0.84 mnt, while production stood at 3.41 mnt in the period under review, up 2%, y-o-y, according to latest data released by the Iranian Steel Producers Association (ISPA).

Meanwhile, Khuzestan Steel Company (KSC) and Mobarakeh Steel Company (MSC) announced that they had faced cyber attacks. However, the attacks have not had any major impact on the production lines of the companies.

Domestic billet, rebar prices fall on weak demand

Domestic billet and rebar prices continued their downward trend due to weak demand, as the domestic market is awaiting political negotiations, formally called the Joint Comprehensive Plan of Action, which is to be held in Doha, Qatar, sources informed SteelMint.

Domestic billet trade at IME fall over 60% w-o-w

Domestic billet sales on Iran Mercantile Exchange (IME) fell sharply by 64% w-o-w. Meanwhile, the average sales price witnessed a 2% w-o-w marginal fall.

Around 92,800 t of billets were traded on IME in the week under review at an average sales price of 134,996 Rial. Last week, about 257,700 t of billets were traded at an average sales price of 138,309 Rial.

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 may become a deciding factor for the export market. Also, as buying bids are falling, export prices may see some correction in the near term, but a recovery in global scrap prices may see it balancing.