Billet- Sudden upward trend
Last week in Iran market billet price surged upward suddenly by around USD58/MT because of two main reasons including:
1-Long products price rise
2- Billet shortage in the market.
Despite expectations, after supply level of producers increased, sections prices didn’t drop. In the contrary higher Euro exchange rate supported billet market.
Suppliers have strict transaction terms and due to liquidity shortage, limited deals were done in billet market.
Latest offer price in import market was prevailing around USD645/MT cfr Anzali. Domestic prices have increased and CIS supply level is limited, so foreign suppliers are considering a USD20-30 /mt billet price rise to Iranian customers.
By watching sections market trend this week, billet market sentiment would be clear.
Long products- Prices up, despite low demand
Last week debar price experienced a rise of around USD35/mt to USD795. After that a price correction was expected due to sluggish demand but it didn’t happen as producers declined supply level to control prices.
Market participant had forecasted a rise of around USD48/mt when government would announce the new budget, but prices raised a couple of weeks sooner.
Higher cost price, sluggish demand, raw materials shortage and many other factors has changed the situation for steel mills. Isfahan steel tried low supply policy for I-beam and was successful as transactions level increased in Iran Metal Exchange. Positive sentiment at IME about possible 5% price rise has increased market confidence.
It was expected that Isfahan steel policy would bring balance to market and make it stable. But it didn’t work. Isfahan Steel’s offer for mix parcel of Debar and I-beam in IME would mean higher price of USD799/mt including 4% VAT, but at the end of the week warehouse inventories by traders in Tehran were priced at around USD 814 – 833/mt. these offers calmed down the market a little.
Many market participants believe that debar price has peaked in domestic market as:
1-Most of the purchases were for stockpiling not real demand
2-Government is strictly controlling prices, so they wouldn’t increase significantly.
Market is filled up by a lot of rumors. One of them is that an inventory of 200,000 tones debar is ready against further price increases, which would be injected to market when necessary.
Flat products- Prices ready to rise
Flat products market was silent last week. Excess supply of Mobarake Steel Mill in the market besides sluggish demand made the situation worse and some sizes of HRC such as 10 and 15 mm dropped a little at the end of the week.
In the current situation, flat products prices are ready to surge upward regarding following main factors:
1-Strict policy of Mobarake Steel in sales level
2- Announcing higher premium for some sizes of CRC by the mill
3- Limited supply level of HDG
4- Higher import prices and no interest in foreign offers
Though supply level would fall very fast and a sharp rise for some sizes of HDG and CRC is possible in less than 2 months, unless mills would start summer vacations sooner.
By beginning of last week, 2 mm HRC price was up to USD728/mt on truck in Anzali port including 4% VAT. Main problem of the product is low demand of pipe and profile producers.
Import offer prices didn’t change, but due to high supply of Mobarake steel, analysts predict that any change in HRC and CRC market is unlikely. In the coming weeks, supply policies of producers would increase flat products prices.
Iran Steel Service Center