Iranian mills have been having difficulties selling their billet abroad for a while now, particularly as their high price ideas have not really matched buyers’ expectations globally. However, despite the recent easing of Iran’s currency exchange regulation, which is supposed to support export operations in many industries, including steel, high billet production costs are still holding back Iranian mills from providing discounts. Currently, tight natural gas and electricity supply in Iran is limiting producers’ outputs and impacting their costs of production, putting them in a difficult situation. “It's a totally different year. Up to now, we did not have electricity in the summers and gas in the winters. Now, we don't have either of them,” a source told SteelOrbis, adding, “So, from my view, it's a little hard to expect them to show flexibility and lower prices.”
Iran’s South Kaveh Steel Company (SKSCO) has lately announced a billet export tender for 10,000-30,000 mt for end-of-December or early January shipment, with a December 21 deadline for bids.
The latest prices for ex-Iran billet were at $450-455/mt FOB a few weeks back and, according to sources, mills will be aiming for the same levels for their prime cargoes. However, these prices will be difficult to achieve outside of the GCC, where $480-485/mt CFR from Iran should be acceptable levels. In Asia, the latest offers for billet from regional buyers have been reported at $470-480/mt CFR, while Iran in theory could achieve the higher end of the range, but with the condition of a small discount or advantageous freight. In Egypt, the workable prices from Iran are not higher than $460/mt CFR, while in Turkey the ex-Iran workable price is at around $470/mt DAP for small truckloads.