Billet
Billet market passed week 33 in waiting policy. Depressed sections market made billet demand lower, despite the fact that with higher billet price in global markets, a rise in Iran market was expected.
But by Monday news about drops in foreign prices made some sellers worried.
By middle of the week after US Dollar rate increased in Iran, market participants especially in sections market became optimist regarding future trend and this helped billet market sentiment improve. Consequently by end of the week billet size 150X150 mm was prevailing around USD763/mt on truck in Anzali Port including 4% VAT compared to USD730/mt a week ago.
As billet import level to Iran has declined and traders are not in a hurry to sell their stocks, a rise in domestic prices is expected. Current offer price in import market is USD705-715/mt cfr Anzali Port.
Long products
Last weeks of every month a lull in steel market in not something strange, but at the beginning of last week by drops in exchange rate per day, depression of the market was more tangible. By Tuesday when US Dollar rate increased and some rumors about changes in government policy for cutting controls on prices, made market sentiment improved and purchase levels increased. Debar base price raised by USD10/mt but just due to expectations for price improvements not real demand. At the moment market participants are considering two views:
First view says that due to shortage of demand any rise in steel products prices is impossible and the current trend will continue till February 2012, after parliamentary election. At the moment government has focused on controlling inflation rate as the first priority.
Second view says because of continuing declines in demand level during last current year, production level has reached the bottom and raw materials import level has been limited too. So during second half of current Iranian year supply shortage and consequently higher prices would be the common trend.
The big problem of steel mills is shortage of liquidity, so any positive or negative volatility will increase pressures on producers.
Flat products
Hot rolled coil 2 mm thickness had a downward week. Its price has picked, so a correction was expected. HRC demand is so limited, so decline in import level during last 3 months didn''t support its price last week. HRC price dropped by USD24/mt and finished the week at USD891 /mt on truck in Anzali including 4% VAT. Also some says 180,000 tones of HRC 2 mm has been purchased and is on the way to Iran, may be when arrives, would help the market to be more balanced.
In domestic market, Mobarake Steel HRC price was stable due to seasonal lull. If current low supply of mills continue, after Ramadan a rise in prices in inevitable.
CRC and HDG market were depressed because of seasonal factors, but their market inventory level is limited and after Ramadan when mills increase production levels, prices will change.
In import market HRC 2 mm is offered at USD755/mt, CRC is USD780/mt and HDG around USD980-1050/mt, all cfr Anzai Port, but buying interest is so scarce.
Iran Steel Service Center