Date: 07 December 2018 , 01:03
News ID: 2824

Is Iran Routing Steel Billets Exports through India?

A steel billet export vessel arrives at Indian port on 2nd Dec, 2018, from Iran, which is likely to be re-routed to Thailand, SteelMint learned from market participants.
Is Iran Routing Steel Billets Exports through India?

Recently, a consignment of prime newly continuous casting steel billets weighing around 23,500 MT grade 55P size 150MM X 150MM voyaged on November 26, 2018 from Bandar Imam Khomeini port, Iran reached Kandla port, India’s west coast on 2nd December, 2018.

However, this consignment is not to be consumed by Indian re-rollers rather it will be re-exported to Kohsichang port, Thailand, which is eventually the largest buyer of Iranian billets. Sources mentioned to SteelMint that cargo is bought by a Russian trader and will be exported to a Thailand based trader.

This is evident that traders are exploring export routes to other countries via India amid US Sanctions on Iran.

US Sanctions made exports tough for Iran

In August 2018, United States (US) President Donald Trump had withdrawn from the 2015 nuclear accord with Iran and re-imposed many sanctions against the Islamic republic. Through these sanctions, US is aiming to reduce Iran’s oil exports to zero in a bid to curb the Islamic Republic’s missile program and regional influence. But the impact of these sanctions is havoc on Iran’s economy as a result of which now Iranian exporters are trying to export through those countries with which Iran has a bilateral trade agreement.

India-Iran bilateral trade

Due to sanctions and financial restrictions, Iran cannot trade in US Dollars (USD), but Iran is open to accept payment in rupee (INR) for oil. There is a possibility of bilateral trade between India and Iran but as of now India has been exempted from US Sanctions only for the purchase of crude oil.

Billet export prices in Iran drop due to fewer buyers

Billet export prices in Iran have dropped to around $410-415/t FOB levels on fewer buying interest. As market participants fear, the return of Chinese billets suppliers to the export market in recent week is likely to have further negative effect on Iran’s semi-finished steel exports.

Thailand remains top importer of Iranian billets

In calendar year 2017 alone, Thailand imported 1.24 MnT from Iranian Billets whereas Iran’s total billets exported were reported at 5.6 MnT. This year CY18 till October, Iran’s billet exports have reached 5.76 MnT out of which Thailand has already imported more 1.29 MnT of billets.

 

 

source: SteelMint