Increased Iranian billet demand boosts activities of Turkish and CIS exporters

Improved steel billet demand in Iran has continued to support the revival of steel billet export activities of producer countries. This week, some billet transactions from Turkey's Iskenderun region to Iran have been concluded at $580-585/mt ex-works, while some higher volume transactions from other regions of Turkey have been concluded at $580-595/mt FOB.
 
The Iranian central bank is providing foreign currencies to importers at levels significantly below the free market levels for transactions via letter of credit and since Iran can only buy Turkish origin billet with payments by letter of credit, Iranian demand for Turkish billets has increased.
 
Currently, ex-CIS steel billet offers to northern Iran via the Caspian Sea are standing at $610/mt CFR. However, since these offers are for advance payments and as the Iranian central bank is providing foreign currencies to importers at levels below the free market levels only for transactions via letter of credit, CIS billet offers to Iran which at first glance seem more advantageous as compared to Turkish offers are in reality less competitive. Nevertheless, when all extra costs are included, ex-CIS steel billet offers are still competitive for some regions of Iran. Thus, there may be some ex-CIS steel billet transactions to Iran in the coming days.