Billet
During last week billet market was downward in Iran as;
1- Sections prices dropped significantly
2- Higher billet market inventory, as imported parcels have arrived
3- New Iranian Year is near and traders and producers are more aware about their inventory level, so try to sell more.
Billet price was around USD958-977/mt at the beginning of the week but dropped to USD888/mt in the middle of the week. As year end is near in Iran, transactions levels has declined and are around 500 tones per lot. In global markets billet price is decreasing but problems in opening LC won’t let Iranian buyers to be active in foreign markets. Besides buying tonnages are low, so they prefer to purchase from domestic market. Domestic billet was around USD 870-888/mt ex-work, depending on quality. The current trend won''t change till end of current Iranian Year ( 19 March 2012) as any rise in demand level is unlikely.
Long products
Last week long products market was downward and prices dropped by USD89/mt for some sizes and made steel mills went out of market. But small traders were offering in the market. Prices were downward as debar price in Tehran market was cheaper than ex-work prices. Traders were worried about more drops in prices and besides they had inventories bought in lower prices. By Sunday, Khorasan Steel supplied in IME, so helped market to be a little calm. Base price for debar size 14-25 mm was USD977/mt ex-work. Then by Monday after some rise in demand level in IME, market trend improved, yet cheap offers in Tehran retail market was influencing the trend but by end of the week steel mills didn''t let prices drop and helped market to stabilize.
I-beam price declined by USD70/mt at the beginning of the week and was stable at that rate. Angle and Channel started the week by USD27/mt decline.
It can be noted that some part of price decrease in sections market during last week was corrections due to exchange rate changes in last weeks and just price bubbles. Traders worried about their investments value, tried to by steel, but after drops in exchange rate and market sluggish situation, the bubble burst and prices dropped suddenly.
Imported billet at prices of USD888/mt can be realistic. So debar price shouldn''t be lower than USD1020/mt ex-work. So retail price including 4% VAT shouldn''t be lower than USD1065/mt. These prices are based on exchange rate of USD1/12,260 Rials.
Flat products
Flat products market was volatile during last week in Iran. HRC 2 mm was around USD976/mt, and then dropped to USD879/mt and increase again to USD905/mt at the end of the week.
Other sizes of HRC production of domestic steel mills were dropping too. A reason for the declines in prices can be drops in exchange rate which made import parcels cheaper and the other reason would be cheap purchase of last months in IME which their delivery time has arrived. Traders worried about more drops in prices suggested some discounts, so it made market more downward. If exchange rate decreases, HRP market would be downward as demand level is limited and last month import level was high. Global prices are downward too.
CRC market was downward by USD 18/mt due to sluggish market trend. If Mobarake Steel increase supply level in IME more, the price will continue dropping. But inventory levels are low and supply level increase till the year end is unlikely.
HDG market was downward too and declined around USD27/mt, but supply level is yet limited, though market participants expect some improvement in the market.
Iran Steel Service Center