The only reason behind billet price surge was limited DRI supply in Iran. DRI price passed USD 197 /mt during the week in Iran. DRI producers are active in export market, besides hot weather has made some mills cut production or start their annual summer repairs. Therefore, domestic supply level has dropped significantly. Some cargoes were offered at USD 190 - 192 /mt but was in limited quantity and didn’t affect market trend. Generally, billet price has peaked and long products demand level has dropped seriously, though, billet upward trend stopped.
By last Wednesday, Esfahan Steel co sold 82,000 of its long products at IME, which helped long products market become calm and affect billet market too. There are some talks that Chadormalou Mining Co would start its summer stoppage next week after Ramadan Holidays. As the mill is main supplier of pellet to DRI producers, market would face other fluctuations in coming weeks. Iran DRI production capacity will rise to around 25 million mt till end of the year from current 17 million mt. But market insiders believe just higher DRI production won’t help and market need to find a balance between export and domestic market.
Source: IFNAA News Agency