Iran: Downward Trend Continues in Domestic Billet Offers
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Iranian domestic billet offers has come down owing to low demand of finished long steel. Long products market depression made billet offers downward. Khouzestan steel had offered billet at IME but received low response owing to which the steel mill sold limited quantity at IME.
According to SteelMint assessment, during the beginning of last week (05 Jan'18- 10 Jan'19), domestic billet offers were noted to be around IRR 31,000 /KG (USD 738/MT). Billet offers remained almost stable over the next day with offers noted to be around IRR 30,950/KG (USD 737/MT). During the mid of last week domestic billet offers went up to around IRR 30,300 - 30,550/KG (USD 721-727/MT). Towards the end of last week offers again came down to IRR 30,000/KG (USD 714/MT).
According to Planner, "The main reason behind the downfall is lack of demand and in this time of the year, where it is very cold, demand in domestic market is sliding. So either exports should be encouraged or production should be reduced. I think problems related to returning the money from export back to Iran are the major issues hindering the export. Recently, CBI has limited export of big steelmakers in order to force them to return their money back inside the country. So, steelmakers could benefit from cancelling such rule and do barters in exchange for selling billets and other products."
IR Steel quoted, "Billet price was downward during last week in Iran. By last Saturday average price of sizes 125 and 150 mm was USD 740/MT ex-work including 9% VAT, which finished the week at USD 709 /MT ex-work including 9% VAT. Long products market depression made billet price downward. Besides, market was expecting downward trend. Iran billet export level is declining which will end in higher domestic supply level. Therefore, at the moment there is no reason for expecting upward trend in billet market as real demand is also limited."
During last week, scrap offers in Iranian domestic market was noted to be around IRR 23,910- 26,500/KG (USD 569-631/MT). Domestic rebar offers were ranged from IRR 35,350 - 36,380/KG (USD 842-866/MT).
| Commodities | 5/1/2019 | 6/1/2019 | 7/1/2019 | 8/1/2019 | 9/1/2019 | 10/1/2019 |
| Scrap | 23,910 | 25,900 | 26,280 | 26,300 | 26,500 | 26,350 |
| Billet | 31,000 | 30,950 | 30,300 | 29,700 | 30,550 | 30,000 |
| Rebar | 36,070 | 36,380 | 35,910 | 35,350 | 35,600 | 35,500 |
| Difference between Scrap-Billet | 7,090 | 5,050 | 4,020 | 3,400 | 4,050 | 3,650 |
| Difference between Billet-Rebar | 5,070 | 5,430 | 5,610 | 5,650 | 5,050 | 5,500 |
Unit: IRR/KG
Source: Planner
Major Steelmills Offered Billet in IME
Khouzestan Steel Company offered 50,000 MT billet on 07 Jan'19 and sold 23,000 MT 5SP billet in IME at IRR 28,625/KG (USD 681.55/MT) excluding 9% VAT against the demand of 29,000 MT.
Khouzestan Steel Company offered and sold 46,000 MT billet on 09 Jan'19 5SP billet in IME at IRR 28,625/KG (USD 681.55/MT) excluding 9% VAT against the demand of 50,000 MT.
