Iran: Billet export prices hit a record-high on active Chinese buying

In a recently concluded billet export deal for China, Chadormalu Mining and Industrial Company sold 30,000 t billets at $570/t, FoB through a tender for May '21 shipments, sources reported to SteelMint. With this deal, the Iranian billet export prices hit an all-time high level, as per data maintained with SteelMint since 2018.

The Chinese buyers preferred Iranian billets as their offers were reasonable compared to Russian and Indian billets. For instance, Indian billet offers are currently at $590-600/t, FoB. While, the latest offers from Russia heard at $655-660/t, CFR China.

On the other hand, the buying bids from China are just below $640/t, CFR. Amid softened Chinese rebar futures, Chinese buyers have lowered down their bids. However, Chinese domestic billet prices witnessed a further rise of RMB 20/t today to reach RMB 5,060/t ($773/t), ex Tangshan including 13% VAT. Hence, Iranian billets are currently China's preferred billet buying levels.

In the meanwhile, other Iranian mills were seen preparing for the tenders in the coming weeks. However, for this week, we haven't heard any other export deal from Iranian mills.

Domestic demand remained strong post-Iranian New Year (Nowruz): The domestic billet prices in Iran remained supported after Nowruz. In a recent trade event hosted at the Iranian Mercantile Exchange (IME), approximately 98,000 t billets were traded at an average price of IRR 107,876/kg ($432/t). The total offered quantity for this week was around 135,000 t.

Iran's semi-finished steel production rises by 11%: According to the latest data released by the Iranian Steel Producers Association (ISPA), the steelmakers produced around 48 mnt of semi-finished and finished steel during the first eleven months of the previous Iranian year (20 Mar '20 - 20 Feb '21), according to Financial Tribune’s report.

The semi-finished steel production stood at 27.72 mn t, up by 11% y-o-y, while the output of finished steel increased by 10% y-o-y to reach 20.21 mn t.

Iran's output of direct reduced iron also grew by 9% to 27.84 mn t.