Export billet prices from Iran dropped in the week to Wednesday August 18, following the global downtrend in the rebar market.
In China, which has been one of the major outlets for Iranian steel lately, bids for non-Iranian material dropped to $680 per tonne cfr following the sharp decline in rebar futures prices.
The most-traded January rebar futures contract closed at 5,017 yuan ($773.51) per tonne on Thursday, down by 127 yuan per tonne from a day earlier and by 311 yuan since Monday.
Iranian material is traditionally priced $10-20 per tonne lower than billet from other origins due to the risk involved in trade amid the US economic sanctions against the country.
The cost of freight from the southern ports of Iran to China increased by another $5 per tonne over the week to $75 per tonne and, coupled with an additional minimum extra charge of $10 per tonne for money transfers and trader margins, that left the Iranian mill price at about $575-580 per tonne fob to attract traders to buy this material for further resale to China.
This price level was not considered attractive by the Iranian mills, however, which currently have limited availability of billet – not only for export but also for the domestic market, due to ongoing issues with electricity supplies in the country.
Mills were, therefore, seeking higher prices elsewhere and, according to one trader, customers in the Gulf Co-operation Council (GCC) region, as well as in Jordan and Africa, were ready to accept the raised offer prices.
Two cargoes for Iran-origin billet for wire rod production, totaling 70,000 tonnes, were sold to traders at $627 per tonne fob and $625 per tonne fob, sources said. Taking into considering the extra payment for changed chemistry, the equivalent price for basic-grade billet would be about $610-615 per tonne fob southern ports of Iran. they added.
Fastmarkets’ weekly price assessment for steel billet, export, fob ports Iran, was $610-615 per tonne fob on August 18, down from $615-625 per tonne a week earlier.