EghtesadOnline: Prices in the Iranian semi-finished steel export market decreased somewhat in the week ended August 1 because buying activity in the major outlets was limited by the imminent renewal of US trading sanctions against the Middle Eastern country.
At the same time, volumes of billet and slab available for export were limited by the Iranian government’s request that more steel products be allocated to domestic customers, where demand has increased significantly in recent weeks, Metal Bulletin reported.
“The country’s steel industry has been instructed to allocate at least 50% of its output to the domestic market through the Iran Mercantile Exchange, and with a base price of an average of three international market indices,” Hamidreza Taherizadeh, the vice president of Iranian Steel Producers Association, told local press, although he gave no further details.
“Exports will continue, although domestic demand will be a priority for billet producers,” Financial Tribune quoted him as saying.
According to sources in the market, however, the increase in steel demand in the country was not spurred by real consumption but by a loss in the value of the national currency.
“The [Iranian] rial is losing value very quickly due to the [imminent application of] US sanctions, so people involved in trade prefer to buy commodities rather than to keep money in their hands,” a source familiar with the situation told Metal Bulletin.
With the reduced availability of material from Iran, activity in the export market was limited. Customers preferred to wait to see the consequences of the new US sanctions, which are expected to come into force on August 6. As a result, prices softened.
Metal Bulletin’s weekly price assessment for Iranian export billet was $490-500 per ton FOB on August 1, against $500-505 per ton a week earlier.
Offers of Iranian billet in the UAE were heard at $510-515 per ton CFR, equivalent to $490-495 per ton FOB, but no bookings were reported.
In Asia, a cargo of Iran-origin billet was rumored to have sold within the range of $530-535 per ton CFR, or $500 per ton FOB. But this information could not be confirmed at the time of publication.
One local producer said that his mill had received inquiries from customers in the (Persian) Gulf Cooperation Council countries, North Africa and Asia at $495 per ton FOB. But the Iranian government requires export transactions to be at the official rial-dollar exchange rate, which is significantly lower than the free market rate, so that price was not attractive for producers.
In the slab sector, buying activity was livelier, with several cargoes being sold within the range of $500-505 per ton FOB, notably to Southeast Asia.
Metal Bulletin’s weekly price assessment for Iranian export slab was $500-505 per ton FOB on August 1, up week-on-week by $10 per ton.