Iranian Domestic Billet Price Rise in Line with Increase of Base Price at IME

Iran, one of the largest billet producer and exporter in MENA has recently faced second wave of economic sanctions from US. This sanction primarily targeted banking, insurance and shipping sector of Iran. Last week billet prices reportedly increased a bit well ahead of secondary sanctions.

As per SteelMint assessment, during the starting of week 44 (27-Oct till 01-Nov'18) domestic billet prices were noted to be around IRR 35,910/KG (USD 855/MT). Billet rise increased to around IRR 37,190/KG (USD 885/MT) during the mid-week. Towards the end of week prices were hovering at around IRR 38,190/KG (USD 909/MT).

According to Planner "Steel prices in Iran are mostly following exchange rate of IRR against USD. as long as the currency market is stable, no significant change might be seen. The government has a strong willing to stabilize the currency market and avoid further depreciation of IRR. So, since export might be affected as well, I think we will see a downward trend in the domestic market".

According to IRsteel "Main reason behind upward trend was increase of base price at IME (Iran Mercantile Exchange). Arfaa Steel co offered its billet last Saturday at IME at base price of USD 676/MT. As demand level increased to 49,500 MT, final price reached USD 788/MT ex-work excluding 9% VAT. There were two main reasons behind higher demand at IME; first; Base price was too low and made buyers more interested. Secondly, Arfaa Steel Company do not have problems of Khouzestan Steel Company and customers trust the mill easier, this has made demand level improved.

Last week, ex-rate improved and made long products prices higher, this affected billet price positively. But this week if ex-rate remain stable, would make market quiet as we will have a long weekend due to religious Holidays and everything would depend on next supply of Khouzestan Steel company at IME."

Prices in IRR/KG
Source: Planner