EghtesadOnline: Slack rebar demand in Iran has been putting pressure on local producers. Some of them have temporarily reduced longs production, while some billet producers are considering a rise in export shipments.
Positions of Iranian rebar producers have weakened substantially over the past month in view of steadily low demand. As a result, domestic rebar prices have gone down by $27-39/ton since mid-January. This week some suppliers have tried to raise prices but failed to agree with buyers.
“Market participants do not expect improvement in the near future, thus avoid building inventories,” a source has told Metal Expert.
Weak local demand for longs in Iran has put pressure on domestic billet market activity and affected suppliers’ positions, both in terms of prices and sales. Semis quotes have lost $15-39/ton (1,148-2,050 rials/kg) over two weeks in the physical market, Financial Tribune reported.
The situation has pushed small mills to temporarily cut production rates and at the same time has urged larger companies to increase their export volumes.
“Cold weather and demand have been shutting down the market. Also, high competition is the main reason for price drops in the domestic market. So, export is a good replacement [for local sales],” a source at Esfahan Steel Company told Metal Expert.
Other Iranian billet sellers hold the same opinion, especially amid satisfactory demand for billets, coming from abroad.
“Firstly, we provide semis for the local market, but if it does not give us support, we allocate more volumes for export,” says a representative of Khouzestan Steel Company.
Iranian Mercantile Exchange has also been inactive in January, with just 32,373 tons being booked, mostly in the second half of the month. The major part of the tonnage belongs to KSC that has recently managed to sell 24,800 tons of billets for March delivery at $375/ton (14,250 rials/kg) EXW.
Considering the sluggish activity in the local long steel market in Iran and the situation in the billet segment, local buyers have been showing almost no interest in sourcing semis from abroad.
Under the circumstances, foreign suppliers are refraining from making active offers to Iran.