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Flat Steel Import Slows on Currency Rate Issues

Flat Steel Import Slows on Currency Rate IssuesFlat Steel Import Slows on Currency Rate Issues

Flat steel import trade in Iran has been almost non-existent in the past several weeks, because of currency exchange rate issues.

One of the major concerns for traders selling material to Iran and Iranian customers has been the 20% devaluation of the country’s national currency, the rial, since the beginning of April.

On April 18, the rial was trading at 57,000 to $1 in the open market, while the official exchange rate was 42,127 to $1. On April 1, the equivalent figures were 47,680 to $1 (free market) and 37,682 to $1 (official).

In addition, the euro, the currency used in a significant number of Iran’s flat steel import trades, strengthened against dollar, which pushed up the equivalent euro value.

Russian mills, which supply around half of Iran’s flat steel import volumes, trade their products in euros because the dollar cannot be used officially in Iran due to remaining US trading sanctions.

Kazakhstan, another large supplier of flat steel to Iran, trades its material in dollars.

In these conditions, buying activity in Iran was significantly subdued.

Offers of Russia-origin hot-rolled coil were reported at €475 ($588) per ton FOB Astrakhan or $608 per ton CFR Iranian northern port of Anzali, taking the estimated cost of freight to be around $20 per ton.

Market participants said no price would be attractive now in Iran because of the currency rate issues.

Traders said mills would agree to decrease prices to €465-470 per ton FOB, equivalent to $595-600 per ton CFR, if a firm bid were made.

Metal Bulletin’s weekly price assessment for Iranian imports of 2-mm HRC was $595-600 per ton CFR on April 18.

The assessment for import cold-rolled coil in Iran was $630-640 per ton CFR, also on April 18.

The Russian material was available at €505 per ton FOB Astrakhan, equivalent to $644 per ton CFR Anzali at a freight cost of $20 per ton.

Sources said mills would agree to provide a €5-10 per ton discount, if a firm bid were made. But no bookings of CRC were reported over the past week in Iran.

 Export Billet, Slab Prices Stable

Iranian semi-finished steel export prices went largely unchanged in the week that ended on April 18 because of lack of activity in the market.

Metal Bulletin’s weekly price assessment for Iranian billet exports was $495-505 per ton FOB on April 18, unchanged week-on-week.

Several cargoes were reportedly sold to the Persian Gulf region within the range of $500-505 per ton FOB.

Another booking was heard done by Indonesia at $520 per ton CFR, equivalent to $495-500 per ton FOB.

In slab steel, the price assessment for Iranian steel slab export stayed at $535-540 per ton FOB on April 18, the same as last week.

There was a sale of slab to Southeast Asia at $540-545 per ton FOB, according to a source, but this could not be widely confirmed at the time of publication.

Previous confirmed bookings of May-rolling Iranian slab were reported within the range of $535-540 per ton FOB.

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