United Arab Emirates-based rebar mill Hamriyah Steel is mulling sourcing billet from Iran with a view to relaunching production in the coming months, a source close to the firm tells Kallanish. A concrete date for any restart is yet to be set however.

The company, which has produced minimal tonnages intermittently since October 2011, has been weighing up sourcing billet from China. The East Asian nation has substantially stepped up shipments of the semi-product to the Middle East and North Africa in the last twelve months. Alternatively Hamriyah could source feedstock from regional mills, Jindal Shadeed in Oman or SULB in Bahrain.

However, following last week’s nuclear deal with western powers that is expected to soon see the removal of economic sanctions, Iranian billet producers are likely to compete with the Chinese to supply the Middle East.

China-origin billet offers to UAE are at $310-315/tonne cfr, lower than Iran-origin quotes of $335-340/t, but deliveries from China take a minimum of two months. “We don’t know what the price will be in two months’ time,” the source says. “Iranian billet is more expensive, but we can get it within a month… China is changing billet prices every day because it has so many producers – Iran has two producers, Esfahan Steel and Khouzestan Steel, which change their price once a month.”

Iran also plans to bring on line a host of new merchant billet mills by end-2016, which will provide a wider variety of supply.

Hamriyah is a 1 million tonnes/year re-roller that began production in January 2010 during testing times for the UAE rebar market, which was hit hard by the 2008/09 economic crisis. Billet was then sourced from Russian joint venture partner Metalloinvest.

Following its restart, Hamriyah’s main target sales market will be UAE, followed by other GCC countries. However, there are concerns over margins after ESI this week slashed its rebar price for August domestic deliveries to a new post-2009-economic-crisis low of AED 1,690/t ($460/t) ex-works (see Kallanish 22 July). The latest Turkey-origin sale to UAE was also at the low price of $415/t cfr.