The unrest seen in
Iran since the June 12 presidential election has caused strong stagnation in the local
billet market, just as in the other markets for long and flat steel products in the country. With economic activities in the country affected by the current political situation, demand levels in the Iranian steel markets have weakened, though some rising movements had been observed before the presidential election.
Khouzestan Steel, one of
Iran's main state-owned semi-finished steel producers, is currently offering 150 x 150 mm
billet at about $430-440/mt in the local market. Meanwhile, most Iranian re-rollers prefer to buy
CIS origin ready stock
billet as its price is generally lower than Khouzestan Steel's price. On June 21, a batch of ready stock Russian
billet (
Mechel production) was offered via the
Iran Mercantile Exchange (IME) at about $465/mt; however, it failed to find a buyer with potential customers bidding a maximum of just $425/mt.
The privately-owned
billet producers which have come on stream in the last few years in
Iran are suffering from the weak demand and the low prices of
billet in the local market. Most of them have cut back their
billet production and some of them have even halted
production operations, due to lack of profit margin and the possibility of incurring losses under the existing circumstances.
Iran's volume of semi-finished steel imports has declined in recent months due to the weak demand levels in the stagnant domestic market; with ready stock
billet prices often lower than offers for fresh
CIS production, local traders are not so interested in importing
billet.
Iran imported about 3.8 million mt of semi-finished steel (mainly
billet) in the last Iranian year (21.03.2008-20.03.2009) while it imported more than 4.1 million mt in the year before, according to the Iranian customs authorities.