Iran: Billet export prices remain largely stable in a recent deal

Iranian billet export offers broadly remained stable this week on bid-offer disparity, amid falling Chinese rebar futures supported by the bearish global scrap market sentiment. A market participant told SteelMint that, " Soon after the market went slow the Iranian mills were struggling to get the desired price levels."

We confirmed this sentiment with one of the leading steel exporters whose official said, "this time the bids did not match our expected price index, and we are likely to cancel the tender."

On the contrary, Iran's leading steel exporter has concluded an export tender for 30,000 t billets (150*150mm) for early Mar '21 shipments. The company managed to achieve a price level of $570/t, FoB. SteelMint's billet export price assessment stands at $565-570/t FoB.

Chadormalu floats 30,000 t billet export tender: Chadormalu Mining and Industrial Company, one of Iran's leading steel exporter, floated an export tender for 30,000 t billets for Feb '21 shipments. The company is targeting the price levels of $570-575/t, FoB Iran.

On the other hand, domestic billet demand saw a sharp drop in a recent trade event hosted at the Iranian Mercantile Exchange (IME) amid sufficient billet stocks with the re-rollers, sources reported to SteelMint. According to our sources, approximately 18,000 t of billets were traded at IRR 123,213/kg ($490/t), up by IRR 6,045/kg ($26/t). The offered quantity was around 180,000 t.

We further tried understanding from the mills about their approach for the high supply-demand spread created after the IME event. Mixed responses were as follows-

• Billet export allocations may increase.
  
  
• Likely to focus on the finished products in anticipation of better realizations.
  
  

Iran's bulk billet export shipments rise by 30% m-o-m in Dec '20: Meanwhile, Iran's bulk billet export shipments witnessed a rise of 30% m-o-m in Dec '20 to reach 0.48 mn t. China, Indonesia, UAE, and Sudan were the predominant buyers. During the Jan-Nov '20, Iran produced over 18 mn t of billets and exported over 4 mn t.