According to the report by Metal Expert, After the United States sanctions, the might change for Iran’s steel and billet industry.
Iran in the global context: Face to face with a new reality
During the last year, Iran has exported billet product to Far East, GCC (Gulf Cooperation Council), other Middle East countries and Europe. Most of Iran’s billet export was to European countries (53%) and then GCC countries (27%).
Iran’s presence in MENA and Southeast Asia markets
According to the analysis, Iran’s billet export reached its highest between January-February of 2018 that was about 670 thousand tons. Since then, Iran has started a decreasing trend in billet export until July-August of 2018 (about 150 thousand tons). Afterwards, exports experienced an increasing trend for two months and then again, after the beginning of October, export trend got decreased.
Sanctions
Since sanctions renewal, price difference between the CIS countries and Iran has raised again and reached its highest in January 2019. As you can see in the chart below:
Southeast Asia billet market: Highly competitive market for Iran
In Southeast Asia, there are six major countries that imports billets viable for re-rollers including Vietnam, Taiwan, Thailand, Indonesia, Malaysia, Philippines. Among these six countries, Vietnam has the most local billet production and least import and Philippines has the least local production and most imports. The point is that Malaysia, Vietnam, Thailand and Indonesia reduced their import since 2016 but Taiwan and Philippines had an increasing trend.
Billet market players in southeast Asia includes CIS, Iran, Japan, GCC, China, India, Vietnam and others. CIS countries are one of the main players among these eight and Vietnam has the lowest share with 4 percent.
Billet buyers in MENA region
According to the report, six countries are the main billet buyers in Middle East and North Africa region that includes Saudi Arabia, Algeria, Egypt, UAE, Oman, and Bahrain. Algeria has the highest share (24 percent) and Bahrain has the lowest share (4 percent).
• Conclusion
1- Southeast Asia provided more business opportunities for billet suppliers in 2018 than MENA.
2- Global billet exporters refocus from Middle East to Asia.
3- Chinese billet producers stay mostly out of export activity so far.
4- Challenges in long steel market are reducing billet consumption.
5- Challenges in long steel market are reducing billet consumption.