Iran: Billet export trade remains subdued amid power outages

Iran, one of the leading billet exporters, is still reeling under the pressure of electricity issues which has kept trade in the export market dull, this week too. Domestic sales are also down against the last week.

According to credible sources, no trade for exports has been concluded so far this week. However, a few export tenders are expected to come late this week as Chinese buying interest returned with the sharp hike in futures prices.

SteelMint's bi-weekly assessment of Iranian billets (150mm, 3SP/4SP) exports stood at $607/t FOB on 7 Sept'21.

A couple of week back, the Mining Industries Office of the Government of Iran, revoked its earlier stand and lifted the restrictions barring around 84 steel mills from exporting long steel products. Iranian Steel Producers Association (ISPA) voiced protests against the sanctions on exports which saw several mills getting out of the exports purview.

Domestic billet trade volumes on IME down 65% w-o-w: Domestic steel sales on the Iran Mercantile Exchange (IME) decreased sharply by 65% w-o-w on drop in average price. Around 65,220 t of billets were traded in the last one week at an average sales price of 133,028 Rial on IME, as per data received by SteelMint.

However, as China is back to the market, buying interest for billets continued to remain strong amidst increasing re-bar futures prices. According to market sources, a recent deal for 30,000 t of steel billets from Indonesia was concluded at around $710-715/t CFR China for Nov'21 shipments. Chinese re-bar futures for Jan'22 delivery surged by RMB 230/t ($36/t) d-o-d to close at RMB 5,682/t ($879/t).

Iran's steel production falls in Mar-Aug'21 on power outages

Iran produced 10.83 million tonnes (mn t) of semi-finished steel in the first five months of the current Persian year (Mar-Aug'21), down 12% y-o-y. Billets and blooms accounted for 6.50 mn t out of the total semi-finished steel output, a significant y-o-y decrease of 15% while slabs production was down by 9% y-o-y to 4.33 mn t.

As per Financial Tribune, all power restrictions on industries are expected to be lifted by 23 Sept'21. Summer demand has led to a severe power and water shortage in the past few months in most regions in Iran, resulting in blackouts and dry taps.