Iran: Steel billet export prices rise w-o-w on limited allocations

Iran's billet export market witnessed limited trading with prices rising w-o-w. Less number of firm offers and the harsh winter in the region held back trade activities in the market, SteelMint noted.

Meanwhile, an Iranian steel mill has concluded an export deal for 20,000 t of steel billets at $560/t FOB for early-April, 2023 shipment towards the end of last week, sources informed.

However, limited export allocations amidst power curbs kept billet export prices supported. SteelMint's latest assessment of Iran's billet (3SP) export prices stood at around $558/t FOB on 14 February, an increase of around $15/t, w-o-w.

Billet production up in Mar'22-Jan'23

Iran's billet and bloom production in the first ten months of the current Persian year (March 2022-January 2023) registered a 13% increase y-o-y to 15.59 mnt, according to data from the Iranian Steel Producers Association (ISPA).

Domestic billet, rebar prices head north amid DRI supply concerns

Steel billet and rebar prices in Iran continued to rise sharply amid cold weather in the region. Supply of billet and rebar is limited due to a lack of supply of direct-reduced iron (DRI) in the domestic market which has also supported prices, sources informed.

Domestic trade on IME falls over 80% w-o-w

Domestic billet sales on the Iran Mercantile Exchange (IME) fell sharply by 86% w-o-w. However, the average sales price inched up by 2% w-o-w.

Around 13,450 t of billets were traded on the IME in the week under review at an average sales price of 179,656 Rial. Last week, about 99,670 t of billets were traded at an average sales price of 176,250 Rial.

Outlook

Iran's semi-finished steel export prices are expected to remain supported because of limited offers in the market. Moreover, the country is facing a severe energy shortage. However, a reduction in gas supplies during the winter may result in a decline in production volumes, which is likely to affect billet export allocations.