The Iranian steel industry is going through a period of electricity shortages, which is quite typical for the summer period in the country. In the context of insufficient power generation in Iran, supply to households increases in the hot summer months, resulting in limited consumption by industries, including the steel industry. The situation is expected to normalize by autumn, but for now some steel producers have been forced to cut production, in some cases by half, local market sources report. In addition, the electricity supply situation and the related production cuts have been having an impact on semis prices.
In particular, taking into account the general global downturn in the billet segment, some of the regular Iranian exporters find themselves not in a position to be able to sell for now, while some of the first-tier mills have managed to sell some lots without a significant price decrease. Iranian Esfahan Steel Company has recently traded 30,000 mt of billet for August shipment at $475/mt FOB, while the previous indicative workable level was at $475-482/mt FOB, resulting from the deals done several weeks back.
In the meantime, Iran’s induction furnace billet prices have increased from $430-440/mt FOB to $450-460/mt FOB, for August shipment. The reported domestic billet prices at the Iranian Mercantile Exchange are now at IRR 24,500-25,000/kg which corresponds to around $430/mt ex-works, sources report.
