LME Steel Billet Price Leaps; ArcelorMittal, Novolipetsk, Eye a Less-Sanctioned Iran

On Tuesday, the steel billet 3-month price experienced the biggest jump this year, rising a significant 5.4 percent on the LME to $390.00 per metric ton. The steel billet cash price remained essentially flat on the LME at $365.00 per metric ton.

One of the major factors in this rise may have been that economic sanctions eased last month under a temporary accord with Iran.

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Even after seven years of international sanctions, the Islamic Republic of Iran still consumes more steel than France or the UK. It’s a major automaker and needs massive infrastructure for its oil and gas industry, consuming about 20 million tons a year of the metal, according to Bloomberg LP. Iran is shaping up as a hot, untapped opportunity for Western steel exporters, particularly high-grade mills.

ArcelorMittal and Russia’s OAO Novolipetsk Steel have mills in central Asia that supplied Iran before sanctions began in 2007, when it imported 12.2 million tons a year of the metal, a value of $6 billion today. Other steelmakers are quietly testing the waters.

About 45 producers sent representatives to a steel conference last month in Tehran to study export opportunities and investing in Iran’s domestic industry, Bloomberg reported.

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