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Iranian Exporters of Square Billet Reduce Prices
Economy, Business And Markets

Iranian Exporters of Square Billet Reduce Prices

Iranian suppliers of square billet have reduced prices amid weak overseas demand and bearish sentiments of Chinese exporters.
However, the current price level remains unattractive to most buyers. Although offers from Iranian suppliers are commensurable with tags set by other sellers, demand for Iranian semis is weak given additional issues concerning foreign trade operations, Metal Expert, a Ukraine-based provider of news and analysis on steel products and steelmaking raw materials industries reported on Thursday.
Over the past three weeks, Iranian mills have brought down square billet prices by $10-15/ton to $325-330/ton FOB. Khouzestan Steel Company announced a tender with offers at $325/ton FOB on Saturday, having the necessity of sales.
“Because of sluggish local market for billet, we prefer to export 40-50% of our production these days,” said a KSC representative.
At the same time, some Iranian companies refrain from active trade under the current market conditions because they are unwilling to significantly revise their prices downwards to satisfy potential buyers.
“ESCO is in the market now, but no sales have been registered yet. We have no intention to accept bids so far,” said a company representative.
Meanwhile, buyers are also standing firm. “Buying square billet from Iran for further re-rolling at the current prices is unreasonable because the price gap between rebar and semis is now quite small,” a UAE-based trader said.
KSC and Kish South Kaveh Steel managed to sell large batches of square billet (100,000 tons and 30,000 tons respectively) to the Middle and Far East three weeks ago, while currently buying activity is rather low. This week has seen unconfirmed information about occasional deals with buyers from the Persian Gulf states at $330/ton FOB for November shipment.
Since offers from China and the CIS come mostly at $320-330/ton FOB and $325/ton FOB respectively and that the market expects a further decrease in semis quotes, Iranian mills will likely find it hard to avoid further discounts. Most market participants believe Iran’s demand for square billet is weak despite higher domestic prices, so producers have only two options: to decrease export prices or to decrease production. Therefore, Iran’s largest mills will most likely prefer to keep focusing on supplies abroad.
“KSC will probably increase exports, while ESCO will keep the figure unmoved,” a market participant said.
Metal Expert did not identify the names of the officials it spoke to in this report.

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