Iran exports rebar, wire rod to Europe in July

Iran exported 10,081t of rebar and 597t of wire rod to the EU in July in the first transactions since US sanctions were formally imposed in November, trade data show.

While the European Commission was critical of the sanctions, it has drastically scaled back its steel transactions with Iran since. In the first half of 2019, the EU imported just 7,856t of Iranian steel products compared with 115,190t in the first half of 2018.

But recently the EU set up the Instex special purpose vehicle to allow non-dollar-denominated trade with Iran and there has been more willingness from Washington to return to the negotiating table with Tehran.

As expected Turkey, Russia, Ukraine and Bosnia and Herzegovina took four of the five top spots for rebar exports to the EU. The quota system was renewed on 1 July and those countries, having exhausted their country-specific quotas during the previous period, had cargoes lined up at port waiting to clear customs when availability opened again, market participants said.

Turkey exported 234,037t of rebar to the EU in July, while Russia followed with 73,889t. Ukraine and Bosnia and Herzegovina cleared 46,540t and 13,357t, respectively.

Coming in third place in terms of EU rebar imports for July was Belarus, which shipped 57,476t, taking advantage of the "other countries" quota. Under this quota, Belarus can access a total of 140,802t of rebar each quarter. The individual country quotas renew only once a year, in July.

Rebar quotas are being exhausted at a far quicker rate than wire rod after the new quota allocations opened in 1 July. As of today, a total of 336,350t of rebar is remaining under individual country quotas, with 1,956t awaiting allocation. But wire rod quotas have far more availability, with 1.37mn t remaining and 2,723t awaiting allocation.

Similarly, the largest wire rod exports to the EU in July were carried out by countries with individual country quotas. Turkey exported 197,856t to Europe, while Russia accounted for 53,178t, Belarus 49,542t, Switzerland 26,972t, Ukraine 21,001t and Moldova 14,923t.

But new countries ramped up wire rod exports into the EU market, including Japan, Malaysia and South Korea. Japan exported 10,180t of wire rod to the EU in July 2019, up by 121pc from 4,600t in July 2018. South Korea cleared 21,613t in July, almost three times more than the 7,412t exported to the bloc in July 2018. Malaysia exported 24,513t to Europe — its first significant shipment into the market, according to available data.

This demonstrates the extent of the supply glut in the global steel market as more and more countries look to the export market to combat weak domestic demand.