Iran's steel export market faces challenges as global commodity prices fall and geopolitical tensions rise

In the week ending, Iran's steel export market exhibited notable shifts amidst evolving economic conditions. The FOB price for billets experienced a marginal drop of 1%, settling between 470 and 475 USD per ton. This decline follows an extended hiatus in export activities due to stringent electricity restrictions, marking a significant turnaround. A key development was the completion of a major export deal by a prominent steel company, which auctioned 30,000 tons of billets at a FOB price of $472 per ton, with deliveries planned for the end of August.

Despite these developments, power outages continue to be a critical factor influencing the steel market. Until the power supply returns to normal, supply and demand are expected to remain at minimal levels. These challenges highlight the dynamic nature of Iran’s steel export market, reflecting both obstacles and opportunities in the current economic landscape.

In recent weeks, the global market has experienced a notable decline in the prices of oil, iron ore, and semi-finished products, driven largely by a decrease in global demand. This downward trend was further intensified on Friday by an extraordinary plunge in global stock markets, the steepest drop seen in eight years. The ensuing market chaos has left investors unsettled, and a full recovery from this financial upheaval is anticipated to be a prolonged process.

Compounding the economic uncertainty is the ongoing conflict between Iran and Israel, which has cast a considerable shadow over global investment prospects. The escalating tensions have fostered a highly volatile environment, complicating predictions about the future trajectory of the world economy. This is particularly alarming as the Middle East, historically a major oil supplier, is increasingly being viewed as a critical financial hub.

As these geopolitical and economic challenges continue, the global market is expected to remain unstable, with supply and demand at low levels due to ongoing power outages and other disruptions. The situation highlights the intricate interconnections within global markets and the significant impact of regional conflicts on the broader world economy.