Iranian export billet prices increased by $5-10 per ton over the week that ended on July 11, because the availability of material in the market had tightened.
One of the reasons for the reduced allocation of billet for exports was higher demand for the semi-finished product in the domestic market. This was not spurred by real consumption, however, but by a loss in the value of national currency.
“The [Iranian] rial is losing value very quickly due to the [likelihood of renewed] US sanctions, so people involved in trade prefer to buy commodities rather than to keep money on their hands,” a source familiar with the situation told Metal Bulletin.
Another reason for the reduced availability of semi-finished steel was that some mills in Iran faced challenges in obtaining raw materials, again stemming from currency issues. Some mills could not purchase sufficient quantities of direct-reduced iron due to their lack of liquidity, sources said.
And finally, semi-finished steel production was being influenced by water shortage during the dry summer period.
In such conditions of reduced availability, offer prices for Iran-origin billet increased week-on-week to $505-510 per ton FOB, against $500-505 per ton FOB a week earlier.
Customers in the (Persian) Gulf Cooperation Council nations reported offers within the range of $520-535 per ton CFR.
In the UAE, Iranian billet offers were heard at $530-535 per ton CFR, but no bookings were reported over the past week.
In Southeast Asia, Iranian billet was available at $540 per ton CFR, sources told Metal Bulletin.
Recent bookings of such materials were reported within the range of $500-505 per ton FOB in late June.
Metal Bulletin’s weekly price assessment for Iranian export billet was $500-505 per ton FOB on July 11, against $490-500 per ton on July 4.
UAE sources expected to see some bookings next week because they had previously booked significant quantities of Iranian billet.
“UAE customers are now in wait-and-see mode because they do not know what the government’s import policy will be with regard to Iran after [new US] sanctions come into force in August,” one source said.
Another source expected customers in the UAE and Oman to continue to trade with their Persian Gulf neighboring state.
In the slab segment, buying activity was also quiet because Asian customers, which used to buy significant slab quantities from Iran, were largely holding back from booking material from the Middle East country, fearing the aftermath of US sanctions.
“We stopped doing business with Iran quite a while ago because our Asian customers would reject any bookings with Iranian origins,” a global trader said.
Three sources reported a cargo of Iranian slab being booked in Thailand, however, at around $545 per ton CFR.
Metal Bulletin’s weekly price assessment for Iranian export slab was $510-515 per ton FOB on July 11, up by $10 per ton at both ends of the range.
