Iranian export billet and slab prices remained largely unchanged in the week ended on Wednesday May 22, with no major sales heard because producers have their order books filled to last until the end of June or mid-July, sources said.
Billet offers were reported within the range of $385-390 per tonne fob Iranian ports, while recent bookings were done within the range of $380-385 per tonne fob.
Fastmarkets’ weekly price assessment for Iranian export billet was $380-390 per tonne fob on Wednesday May 22, up on the high end against $380-385 per tonne fob a week earlier.
Slab offer prices were at $380-390 per tonne fob Iranian ports,
with one Iranian producer offering material at the lower end of the range saying that the company he represents is in negotiations to sell a large slab cargo to Asia.
Fastmarkets’ weekly price assessment for Iranian export slab was $380-390 per tonne fob on May 22, widening down on the low end from $385-390 per tonne fob a week earlier.
Buying activity was slow in the domestic Iranian market however, with many buyers cautious following the new set of United States’ sanctions against the Iranian steel industry.
On May 8, US president Donald Trump applied new sanctions on Iran, this time targeting the Islamic Republic’s export revenues from its industrial metals sector. The new sanctions apply not only to producers, but to all those who are involved in the metal trade.
“Today’s action targets Iran’s revenue from the export of industrial metals – [which is] 10% of its export economy - and puts other nations on notice that allowing Iranian steel and other metals into your ports will no longer be tolerated,” Trump said in a statement about the sanctions.
The new set of sanctions has split market participants’ opinion on
how Iran’s steel export market will develop this year.
“Things were tough before so there will be no real difference. Many traders do not care about sanctions, so big volumes are still moving to Indonesia and Thailand. Besides that, there is no supplier in the market with prices more attractive than in Iran,” one trader said.
“The situation has already worsened after bank payments were blocked so I don’t think another portion of sanctions will have a bigger effect,” a source on the producer side told Fastmarkets.
“It depends on shipping and banks. I think there will be some effect, especially if the US Treasury makes some example cases,” another trader said.
“I think the new US sanctions will affect steel exports and I think a further 25% reduction in exports is likely,” the fourth source told Fastmarkets, noting that it is most likely to be North African and Italian buyers who will refrain from booking with Iran, while Asian customers will keep buying.
Some customers in Asia however, and in Indonesia in particular, have deliberately stayed away from bookings with Iran in the past several weeks.
Iran’s semi-finished steel exports totaled 4.89 million tonnes in the Iranian year running from March 20, 2018-March 21, 2019, according to the Iranian Steel Producers Association’s (ISPA) latest report. This is a 29% decline compared with the previous Iranian year, when Iranian producers shipped some 6.87 million tonnes of semi-finished products to foreign outlets.
Steel billet and bloom shipments reached 3.31 million tonnes in the Iranian year, while Iran’s slab exports totaled 1.585 million tonnes over the same time period.