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| Iran’s cut in steel imports depressing global steel market |
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 LONDON (Reuters) - Steel exports to Iran, one of the world's top importers of billet used in construction, are grinding to a halt, traders said.
"Iran is the only market in the world that can move billet prices and now trading has basically come to a halt," a steel trader based in Britain said.
Thanks to large-scale building programs in the last few years, Iran has become one of the top importers of steel billet, a semi-finished long steel product mainly used for construction.
The country imported over 3 million tons of semi-finished steel products in 2010 and almost 2 million of hot-rolled coil, a steel product used in transport, construction, shipbuilding and energy pipelines, according to data from the International Steel Statistics Bureau.
Boris Krasnojenov, an analyst with Moscow-based Renaissance Capital, said monthly Iran imports from Russia were over 300,000 tons for most of last year.
"As far as I know, the situation is much worse. Some say CIS mills cut sales 10 times," he said.
The collapse in Iranian imports is depressing international steel billet prices, which fell by about $50 a ton in a month to $560 a ton fob Russia and Ukraine this week.
"All volumes from the Caspian Sea will be redirected to the Black Sea," Krasnojenov said. "That is a major problem for Russian steel plants."
Russia sends about 15 percent of its total exports to Iran, making it the largest source of foreign steel, but the sanctions are pushing it out of the market.
"Steel demand is pretty strong, the problem is the banking system," said Dmitry Smolin, metals and mining analyst at URALSIB Capital. "Russian banks do not have trading lines with Iranian banks to facilitate rouble transactions."
Iran's envoy to Moscow said late last month that Iran and Russia had started using their domestic rial and rouble currencies in bilateral trade instead of the U.S. dollar.
However, market players say the dollar shortage is crippling the steel trade.
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