Iran: Billet export prices spike in recent deals, mills eye over $700/t in upcoming tenders

Iranian billet export prices surged in recent deals for South East Asia and China concluded through tenders. Prices a spiked by over $40/tonne (t) week-on-week (w-o-w). The tender sold to China fetched $20 higher than the deal concluded to SE Asia. The SE Asian buying indications are not in line with the global price indications, as seen from the recent two deals concluded from Iran.

SteelMint has learnt that Iranian mills are eyeing around $700/t FoB Iran in their upcoming tenders.

Deal and offers

• Towards the beginning of this week, Esfahan Steel Company (ESCO), one of the leading steel exporters of Iran sold 30,000 t of billets to SE Asia through a tender. According to SteelMint sources, the company concluded the tender at $645-650/t FoB Iran for June '21 shipments.
  
  
• Iranian billet export prices rose further in a recent deal as another leading exporter, Chadormalu sold 30,000 t of billets to China through the tender concluded on 11 May '21 for June shipments. Sources said the company had achieved a price level of $667-670/t, FoB Iran, higher by around $70 against its previously concluded tender in end-Apr'21.
  
  
• Khouzestan Steel Company (KSC), Iran's leading steel exporter, is heard to have floated export tenders for billets and slabs (30,000 t each) for June '21 shipments. In conversation with a company official, SteelMint learned that it is expecting a price level of over $700/t FoB Iran for the tender.
  
  

Active Chinese buying interest continues to drive the Iranian billets exports market. In the last one week, Chinese domestic billets prices have increased by around RMB 700/t ($109/t) to RMB 5,820/t ($902/t) ex-Tangshan, including 13% VAT.

However, on 13 May'21, SHFE rebar futures contracts fell by RMB 256/t d-o-d to close at RMB 5,915/t. A few market sources are skeptical on the sustainability of such high prices.

On the other hand, domestic demand remained sluggish this week on account of Eid, SteelMint learned from a market participant. Hence, no trades were seen at on the Iranian Mercantile Exchange (IME).