Iran Steel Market Trend in Week 36
Billet
Billet Market was almost stable during last week in Iran. Billet size 150 mm was around Rials 15,700,000/mt on truck in Anzali including 5% VAT and finished the week at some lower levels. As long products prices were downward, billet demand was limited too. During last Iranian month (22 Jul-21 Aug) around 307,000 tons of billet has been imported to Iran. Around 345,000 tons of billet purchased at IME is available in the market so supply level is so high. The downward trend in billet market has made some traders offer the imported parcels which have not delivered yet, so steel mills are not worry about supply level and demand side is calm.
First 2 weeks of current month (up to 08th Sep ) Tehran market was almost closed, so demand level dropped more, but domestic billet from Khouzestan steel mill was offered last Wednesday in IME at around Rials1,100,000/mt higher than before, which was a try to fill the gap between domestic and imported billet.
Global billet markets are almost stable and import price won't be more than USD630-650 /mt CFR Northern ports. Parcels purchased during past months are on the way to Iran. Therefore, if ex-rate doesn't change, billet price won't rise.
Generally, market participants expect Iran billet market to be stable during coming 2 weeks and any drop in price won't be more than Rials100,000-200,000/mt.
Long products
Long product market was downward during week 36 in Iran as supply and demand level was unbalanced.
In demand side:
1- More than 750,000 tones of sections bought at cheap prices in IME, has become available in the market from 3 weeks ago with good profit for sellers. So they are eager to decrease prices when finalizing deal.
2- During last Iranian month, domestic mills offered more than before at retail market.
3- Downward prices in global markets has made importing more attractive and around 7,000 mt of I-beam and 40,000 mt of debar has been imported. Some part of these imported debars has been sold at Imam Khomeini port at Rials 17,000,000-17,200,000 mt including 5% Vat and custom duties.
4- Ex- rate started declining after the non- aligned congress in Tehran, despite expectations.
In Supply side:
Supply level was rising and demand level dropping due to 2 main reasons:
1-Lower demand level from state projects due to market inactivity during first 2 weeks of current month.
2- Lower ex-rate level
Domestic mills have increased their sale prices to be near to retail prices, so traders are not interested to buy from mills and are trying to sell their cheap purchased inventories to increase liquidity. Though, this trend will increase the pressure on prices. Besides, global prices are downward and will be more competitive compared to domestic prices.
Chinese debar is available at USD590/mt cfr Iranian ports for November delivery, and market participants expect more drops in prices due to iron ore downward prices.
If ex-rate level in Iran stay stable, domestic prices would drop, everything is influenced by demand level and ex-rate. There is no concern about supply level at the moment.
Flat products
HRC 2 mm thickness experienced a stable week at around Rials16,050,000/mt including 5% Vat on truck in Anzali. Other sizes dropped by around Rials 3,000,000/mt due to low demand level.
Market participants are expecting some drops in domestic prices, due to over capacity for some sizes of HRC. For sizes more than 15 mm, prices were declining as demand was scarce and import level rose. During last Iranian month ( 22 Jul-21 Aug), HRC import level increased by 8,000 tones, which have been purchased at cheap prices too. Besides, around 70,000 tons of HRC have been purchased at IME more than a month before which will be delivered these weeks. During last month around 296,000 mt of the product has been purchased at IME, so traders are not worry about stockpiling.
In CRC market prices were down by Rials400,000/mt. 20,000 mt of imported parcels, purchased from 2 month ago are arriving Iran. Also around 150,000 mt were sold at IME during last 2 Iranian months at IME and are coming to the market slowly.
Besides this high supply level, demand has dropped significantly as mills consuming CRC were closed for summer stoppage during (05 Aug-05 Sep), but supply level increased during this time.
Kazakhstani suppliers were in trouble around 10 days for delivering their products to Iranian north ports due to flood. The problem was over from last Wednesday, so supply level will increase and will affect downward prices more.
HDG market trend was the same as CRC. During last month more than 12,000 mt of HDG has been imported, but 2 months before that it was around 250 tons. During the same period Mobarake Steel mill offered around 23,000 tons at IME. During last month supply level was limited but market closure in first half of current month won't let prices increase.
Market participant agree that steel product prices have picked in Iran market and if ex-rate fluctuation do not interfere, market would be quiet at least in next 2 weeks.
Ex-rate: Official: Rials 12,260/ USD, Market: Rials 21,848/ USD