Iran: Billet export prices fall to five-month low, further drop likely

Iranian billet export prices witnessed a sharp drop following a deal concluded in the beginning of this week. Bid-offer disparities and cheaper billet offers from Russia have continued to drag down billet export prices to a five-month low, SteelMint notes.

An Iranian mill concluded an export deal for 30,000 tonnes (t) of steel billets. The deal was concluded at around $565-570/t FOB for June 2022 shipment. Meanwhile, one of the major semi-finished steel exporters from Iran, Khouzestan Steel Company, had opened export tenders for 40,000-50,000 t each of steel billets and slabs with the due date on 31 May 2022. The shipments are likely to be scheduled for early August. According to market sources, the tender is still under negotiation.

SteelMint's latest assessment of Iran's billet (3SP) export prices stood at around $565-570/t FOB on 31 May, down $20/t, w-o-w.

"Market price indication was heard at $560/t FOB Iran basis considering the current market scenario. Hence, prices are likely to correct in the ongoing tenders," said an Iranian source.

Domestic billet prices fall, rebar prices rebound

Iran's domestic billet prices fell sharply this week while rebar prices witnessed a recovery following the uptrend on the Iran Mercantile Exchange (IME), sources informed SteelMint.

Domestic billet trade falls at IME

Domestic billet sales on IME fell significantly by 31% w-o-w. Meanwhile, the average sales price decreased marginally by 4%, w-o-w.

Around 89,000 t of billets were traded on IME in the week under review at an average sales price of 140,708 Rial. Last week, about 129,460 t of billets were traded at an average sales price of 146,878 Rial.

Outlook

With the problem of power supply re-emerging in Iran, the country's steel production is likely to remain restricted in the near term, affecting billet export allocations. Power curb notices have already been sent to the steel mills. These mills will be required to reduce their electricity consumption from end-June to mid-September.