Billet
At the beginning of week 25 despite some increases in Long products prices, billet price was unchanged then increased just by Rials 50,000/mt to Rials 12,050,000/mt for size 150 mm on truck in Anzali including 5% VAT. By middle of the week billet price start surging upward to finish the week at Rials 12,500,000/mt. Billet import level has became so limited, so traders are offering more cautiously. Higher debar and I-beam price helped market sentiment.
Billet price in global markets has neared the bottom currently. But LC opening difficulties do not allow importing easily. Fob price for Black Sea origin billet is around USD540/mt, so it shouldn''t be higher than USD620/mt CFR Southern Iranian ports, but suppliers are offering at least 4% higher. CIS billet is around USD640-650/mt CFR Anzali with total prepayment. It is also offered USD 690/mt with LC in Chinese Yuan, which such kind of offer is scarce too.
As long products supply level has increased and prices are fixed by government in IME, higher long products prices would be good news for domestic billet producers.
Long products
Long products prices were upward in Iran market during last week. I-beam average price for sizes 14-18 mm was around Rials11, 600,000/mt but finished the week at Rials 11,933,000/mt. Debar average price for diameters 8-32 mm, picked up from Rials 13,350,000 to Rials 13,807,000/mt. Merchant bars were upward by around Rials100, 000-300,000/mt each day. Angle and channel had more price fluctuations as producers are more dependent on supply level and price of billet. When billet supply level drops and its price is hiking, merchant bars producers will be forced to increase prices. Besides, lower demand has declined production level.
In debar market, domestic re-rollers dependent on buying billet, are facing with low liquidity, so producers which can supply billet themselves would stay in the market. At the moment domestic inventory level is so limited, and any ambiguity in future supply level would make prices surge upward.
Market participants are waiting for higher prices due to coming sanctions against Iran. But it should be noted that economical sanction have two main results, firstly it would decrease overall demand due to lower foreign revenues, secondly it will help domestic steel industry to be self sufficient which would avoid strict rises in prices.
Flat Products
HRC 2 mm thickness market improved a little during week 25, up by Rials 500,000/mt to Rials11, 000,000/mt on truck in Anzali including 5% VAT. For other thicknesses such as 3-15 mm from Mobarale Steel products, prices were unchanged due to competition from import market. Oxin Steel and Kavian Steel mills had stable prices at the beginning of the week then prices rose by Rials100, 000/mt. Demand level is low yet and import parcels are competitive, as global price are downward due to economic crisis. Market participants predict shortage of flat products in coming months as import market is facing problems.
CRC market was stable, but supply level is limited. HDG price increased up to Rials700, 000/mt by end of the week for some thicknesses, due to low CRC supply level and decline in import level.
Due to problems for opening LC and banking affairs, importing steel products is facing more and more difficulties by each day passing. Iranian investors would prefer domestic market at this situation, but these kinds of investments won''t be enough and steel market needs more attention from banks for improvement.
(Ex-rate: Official: Rials 12,260/1 USD Market: Rials18,400 / 1 USD
Iran Steel Service Center