Iranian rebar exports are expected to increase in 2018 as the country's domestic production capacity is far outstripping its consumption, industry sources told S&P Global Platts Wednesday.
Domestic rebar demand during the first eight months of the Iranian year, over April-November, totaled 3.79 million mt, down 12% year on year, according to a report published on the Iranian Steel Producers' Association, or ISPA, website this week.
"As a result of the deep recession in the domestic construction industry, the capacity of long steel is clearly more than the consumption at the moment and exports could be the only solution, at least for the next few months," a private re-roller said. He estimates Iran's nominal rebar capacity at around 20 million mt/year.
The prevailing overcapacity and subsequent competition between steel mills means Iranian rebar offers have been competitive and that export volumes could surge in the 2018 calendar year.
"Billet and slab have been the main exports of the country, but there are new opportunities for exporting of rebar now," he added.
To facilitate exports to nearby locations, the Iran Mercantile Exchange has launched rebar transactions, and the first trade was finalized Sunday with an Iraqi importer, at $500/mt ex-works, according to the exchange.
Iranian rebar exports have increased to 358,000 mt over April-November, 86% more year on year, according to ISPA.
However, domestic consumption of other steel products has been increasing within this period, according to ISPA.
Iran consumed 13.5 million mt of finished products during April-November, up 8% year on year, including 5.35 million mt of hot-rolled coil, up 8% on year; 2.3 million mt of cold-rolled coil, up 38%; and 1.23 million mt of coated flats, 37% higher.
