Billet
During last week Iran billet market was so fluctuated. At the beginning of the week, negotiations between Iran and G5+1 made market full of ambiguities. On Sunday exchange rate dropped to Rials16,500/1USD or lower for importing in high tonnage, so it made market silent and billet size 150 mm increased to Rials11,350,000 /mt on truck in Anzali including 5% VAT. Meanwhile buyers were bidding at Rials 11,100,000 -11,200,000 /mt. At the moment imported billet purchased 1 or 2 month ago has arrive Iranian ports and traders are offering these billets, but sections market is depressed and there is no interest in buying billet.
Exchange rate became upward in middle of the week but long products prices didn't changed. But it helped billet market and 150 mm billet was up to Rials 11,700,000 /mt on truck in Anzali including 5% VAT. At the moment buying billet higher than Rials11,200,000 /mt is not affordable for debar producers.
Last week in import market billet was offered at USD740-760/mt cfr Anzali for 5,000 tones parcels. At the moment due to sanctions, limited number of importers can open LC easily. Generally as global prices of scrap and billet are downward and the current depression in global markets will continue at least for next 2 months, foreign offers will be more interesting for Iranian buyers in near future.
If long products demand stay at current low level in Iran and LC opening problems in import market ease, billet price won't change. but exchange rate should stay stable too.
(Ex-rate; official: Rials 12,260/USD ,
market: Rials18,000/USD)
Long products
Long products market experienced a depressed market during week 16 in Iran. On Sunday Khorasan Steel mill's debar was offered at Rials11, 400,000/mt in IME and was sold up to around Rials 12,500,000/mt due to competitions. Billet from Khouzestan Steel mill rised from Rials 9,990,000/mt to Rials 10,980,000/mt in IME but lower exchange rate made market silent. State construction projects in New Iranian year have not begun yet so sections demand is low, so higher ex-rate at the end of the week didn't help market. Price of debar diameter 8-25 mm dropped from Rials 13,507,000/mt to Rials 13,324,000/mt. For debar dia 16-25 mm in Isfahan, price dropped by Rials 425/mt to Rials 13,145,000/mt.
I-beam price was downward too and changed from Rials11, 717,000 to 11,267,000 /mt including 5% VAT. Angle and channel prices also were declining during last week in Iran.
Some market participants are hopeful about better sections prices in coming weeks as traders tried to destock during last weeks. They had bought during last Iranian year at lower prices so were eager to decrease inventory levels. Besides, negative sentiment has made buying interest limited. Generally during last week main factor influencing prices in sections market was shortage of demand.
(Ex-rate; official: Rials 12,260/USD ,
market: Rials18,000/USD)
Flat products
Last week flat products market was downward in Iran. For 2 mm HRC, low demand and high supply level made its price drop by Rials 1,000,000/mt to Rials 10,800,000/mt on truck in Anzali including 5% VAT. Imported parcels purchased during last 2 months have reached Iranian ports and made market sentiment negative.
Other sizes of HRC had a depressed market during last week and domestic mills prices dropped by Rials100, 000-200,000 /mt per day. Demand level is low but higher supply level from import market and IME influenced market. If current situation continues, Mobarake steel mill prices will be close to IME prices. Besides, imported HRC especially thickness 15 mm or higher is being offered at cheaper prices compared to domestic market. Low demand and these cheap imported HRC won't let prices rise. Some construction companies showed interest in buying flat products last week, if real demand, it will help market improvement. HDG and CRC market were downward too and declined by Rials 300,000 /mt for HDG and 400,000 /mt for CRC.
At the moment factors influencing steel market include:
1- Inventory level: despite the fact that warehouses have been stocked by cheap products from last Iranian year onward, but it is not so much that would change market trend during current quarter ( till 20 June 2012)
2-Demand shortage: At the moment governmental projects do not have any demand as New Year budget has not get approval yet in the Parliament, so the main consumer is absent. If demand level increases, market sentiment will change accordingly.
3- Ex-rate: Third factor which affect steel market frequently is exchange rate, if it rises, sellers will stop offering and prices will increase too.
At the moment there is an important matter which has affected these 3 factors too. Optimistic views regarding nuclear negotiations have made steel market participants very cautious. They make transactions at low tonnages and market is in wait and see policy.
(Ex-rate; official: Rials 12,260/USD ,
market: Rials18,000/USD)
Iran Steel Service Center