Iran: Billet prices drop further, market awaits tender outcomes

Iran's billets export prices have declined further on low bids and limited trade. An Iranian mill concluded an export deal for 20,000 tonnes (t) of steel billets to South East Asia towards the end of last week. The shipment is likely to be scheduled for Jan'22. According to market sources, the deal was concluded at $560/t FOB Iran.

Another steel maker in Iran, Khouzestan Steel Company (KSC), floated export tenders for steel billets and slabs of 40,000 t each. The shipment is likely to be scheduled for mid-Feb'22. As per sources, the mills are still struggling to get the deals concluded. The deals are still under negotiation, it is understood.

"Price expectations from the ongoing tenders are at around $555/t FOB for billets and $565-570/t FOB for slabs," said a source in Iran.

SteelMint's latest assessment of Iranian billets (3 SP) exports decreased by around $10-15/t w-o-w to $550/t FOB on 14 Dec'21.

Domestic billet trade down sharply by 62% on IME

Domestic billet sales on the Iran Mercantile Exchange (IME) decreased by 62%, along with a 1% w-o-w decline in the average price.

Around 57,750 t of billets were traded on IME in the past week at an average sales price of 127,610 Rial. Last week, about 151,300 t of billets were traded on the IME at an average sales price of 128,662 Rial.

Due to natural gas supply shortage, Iranian steel mills are facing an issue.

Chinese rebar futures rebound

Chinese rebar futures contract for May'22 delivery on the Shanghai Futures Exchange closed at RMB 4,529/t ($711/t), witnessing a sharp d-o-d rise of RMB 88/t ($14/t) on 16 Dec'21 and a sharp rise of RMB 236/t ($37/t) on a weekly basis, according to SteelMint data. The recent rebound in Chinese future sparked hopes in the export market. But it will be interesting to see how it will sustain itself in the upcoming days.

Outlook

Iranian billet export trade may pick up in next few days fuelled by the optimistic sentiments post-hike in Chinese futures . The tender outcomes may offer more price clarity.