Billet
Iranian billet market experienced a calm week. At the beginning of the week as expected, in IME domestic producer Khouzestan steel sold billet at Rials9, 700,000/mt which after VAT would be Rials10, 190,000/mt near imported parcels. Billet price was around Rials10, 350,000-10,400,000/mt on truck in Anzali including 5% VAT.
By middle of the week, billet market trend improved but prices were unchanged, when exchange rate increased, billet price rose and some traders prevented from selling at Rials10, 600,000/mt in Anzali. By end of the week prices were down again by Rials 100,000/mt.
At the moment market participants prefer to work more cautious which may continue around next 2 weeks. Government new fiscal year budget has been approved but it takes some time to influence market demand and improvement in prices. Besides, nuclear negotiations in near future has affected market sentiment too, market participants are waiting to see the final results of it.
(Ex-rate; Official: Rials 12,260/1$ , Market: Rials 16,900 /1$)
Long products
Long products market continued volatilities during week 20 as exchange rate was changed and market participants were expecting better demand.
By Saturday market was quiet, by Monday market trend improved and again on Wednesday it became calm. Average debar diameter 8-32 mm in Ahvaz market changed from Rials12,532,000/mt to Rials12,611,000/mt including 5% VAT. Debar diameter 16-25 mm from Isfahan Steel Co increased by Rials 200,000/mt to Rials 12,534,000/mt including 5% VAT. Sudden increase in Exchange rate and expecting improvement in demand, made debar prices increase during last week.
At the moment market participants prefer to hold wait and see policy, so inventory levels are limited especially in Tehran market. If demand level improves a little, traders will start buying from mills. In IME debar and I-beam supply level increased but prices were unchanged. Government is trying to prevent from any rise in prices, but it would increase pressures on domestic mills as prices are at the bottom level.
(Ex-rate; Official: Rials 12,260/1$ , Market: Rials 16,900 /1$)
Flat products
HRC market improved a little during last week but at the end of the week prices were back to last levels. 2 mm thickness HRC was priced Rials 9,900,000-10,050,000/mt on truck in Anzali including 5% VAT. Demand level has improved and producers are not in hurry to sell their products. Besides import level has decreased, so market participants predict HRC price would rise during next weeks.
By beginning of the week price of other sizes of HRC from domestic mills dropped by Rials100,000-300,000/mt, then improved again for some sizes. Sellers stopped offering and market participants were expecting better demand as prices has bottomed.
CRC market continued downward trend during week 20. Some sizes are facing low supply level, but by offering over roll products of Mobarake Steel mill in TME and low demand of pipe and profile producers, CRC market is downward. HDG market experienced a calm week with no change in prices.
Generally Iran steel market was affected by different factors during last week including:
1- Exchange rate increased and steel market was affected by it. Previously steel market was not so much influenced by exchange rate but after ex-rate volatilities during last year, steel market has became more sensitive to ex-rate changes.
2- Coming nuclear negotiations which has increased expectation of stability and possible drops in ex-rate.
3-Demand level, which would increase as New Year budget has been approved in the parliament.
4-Seond phase of subsidy reform plan, which at the moment is not worrying market participants.
Government is trying to control steel prices but at the moment factors influencing steel market are not completely under the control of government. During last 2 months market trend has made many traders stop importing, besides, government strict controls has declined level of investments in steel market. As a result market inventory level has neared the bottom. Any new policy would change market trend suddenly. A clear state policy would help market to be calm with lower harsh volatilities.
(Ex-rate; Official: Rials 12,260/1$ , Market: Rials 16,900 /1$)
Iran Steel Service Center