Iranian mills have continued to show only limited interest in billet exports even though Asian prices are relatively positive. According to sources, some market players are taking time in order to see the outcome of the election in the US, which may affect the political situation in the region and exchange rates, particularly in Iran. In addition, since the cold season is approaching, some natural gas supply cuts to the local industrial sector are expected in Iran. Consequently, domestic prices are set to be stronger in the coming months since steel production in Iran will once again be limited.
Iran’s Sirjan Jahan Steel Company (SJSCO) has announced an export tender for 15,000 mt of 150 mm billet, with bids being accepted until November 25. Sources expect that the workable price for this lot will not be above $450-455/mt FOB and that it will be destined for buyers in the UAE or Oman. For smaller lots and ready EAF billet cargoes, prices have been reported at $425-450/mt FCA Iraqi border with deals at the lower end of the range, while IF billet is offered at $420/mt ex-works, for both domestic and export customers.
In the local Iranian market, the general price level at the mercantile exchange stands at IRR 25,500-26,500/kg or around $335-350/mt according to the $1 = IRR 69,000 free market exchange rate. While using the official government rate at $1 = IRR 49,000, the price level is $475-490/mt. However, one of the mills has recently managed to sell at IRR 27,700/kg or $365/mt or $515/mt depending on the exchange rate. Previously, IME billet prices stood at IRR 24,200-24,700/kg, which is $320-325/mt according to the current free market rate.