iranian billet exporters keep offers firm but bids slide amid softer demand

Iranian billet producers maintained offers to overseas customers in the week to June 24, supported by demand in the domestic market, Fastmarkets learned.____________________“Around 100,000 tonnes of billet were sold in the Tehran Metal Exchange [Iran Mercantile Exchange in the week to June 24]. Local demand is crazy and cargo was sold at much better prices than the export market can accept,” one trader said on Wednesday.According to several sources, deals in the domestic market were done within the range of 68.3 million-69.5 million rials per tonne in the week to Wednesday, equivalent to $414-421 per tonne ex-works.In official exchange markets, $1 was trading at 42,051 rials on June 24, unchanged month on month, according to the exchange rate website In the unofficial free currency market, $1 was trading at 196,500 rials on June 24, compared with 176,800 rials on the same day last month, according to free-market exchange rate site
But there is a third currency rate called NIMA, which is used in domestic transactions.
NIMA is the Persian acronym for an online currency system launched by the Central Bank of the Islamic Republic of Iran (CBI) in April 2018. It is a market where Iranian exporters can sell their foreign currency earnings for Iranian rials.
Market participants attributed the pick-up in domestic demand to a weaker Iranian currency against the dollar.“The NIMA rate is around 15% lower than the free market rate,” a trader told Fastmarkets.
Another trader said it currently stands at 165,000 rials to $1.
In the export market, mills were targeting $375-380 per tonne fob southern ports of Iran for material scheduled for shipment in August. Meanwhile, bids from traders varied within the range of $365-375 per tonne fob, Fastmarkets learned.
A 30,000 tonnes cargo was reported sold at $373-374 per tonne fob. The destination for the cargo was not disclosed by the time of publication, but one trader suggested it could be sold in nearby markets.
“Freight [from Iran] to the GCC markets is only $16 per tonne and $23-25 per tonne to Africa or Jordan,” he said.
The freight to Southeast Asia or China has increased to $28-30 per tonne lately due to the hike in oil prices, which would make the net price without extra costs or trader margins $401-404 per tonne CFR.At the same time, bids for Iran-origin billet were heard at $390 per tonne CFR in Asia.
One trader reported 30,000 tonnes of Iranian billet sold to Thailand at $397 per tonne CFR this week, which nets back to $367-369 per tonne fob. With extra costs and trader margins excluded, the price would netback to around $360 per tonne fob.
In general, demand for import billets in Asia has softened in recent weeks amid adverse weather conditions in China that have hampered construction activity. Sliding demand has caused bids from China to drop, and customers in Southeast Asia followed their lead resulting in softening billet prices in suppliers’ markets.
Fastmarkets’ weekly price assessment for steel billet, export, fob ports in Iran was $360-373 per tonne on June 24, against $363-375 per tonne a week earlier.

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