Billet
Billet price was downward during last week in Iran. The downward trend was due to ;
1- Depression in long products market
2- Higher billet supply level
During last Iranian month more than 280,000 tones of billet was imported to Iran but steel market had almost no activity, so supply level increased. During first 18 days of current month about 306,000 tones of billet has been imported. It is expected that import level of current month be more than 400,0000 tones. Production level of domestic mills has increased too. A new billet production line started supplying in current month. As a result of higher supply level, downward trend of billet price would continue.
3- Lower billet price in global markets
As iron ore and scrap price is downward in global markets, billet price is declining too and has made foreign suppliers offering at USD 570/mt cfr northern ports, which is for cash payment and buying at high tonnage.
4- Lower billet demand
Many long products producers have decreased production level, so billet demand has declined in Iran market.
Concerning current situation, any improvement in billet market seems unlikely. At the moment Korean, Turkish and CIS origin billet is available at Northern and Southern Iranian ports. It was around Rials17,800,000/mt for size 150 mm in Anzali port including 5 %VAT and custom duty. It finished the week Rials 400,000/mt lower. Traders were ready to sell but buyers prevented from dealing.
Long products
Fluctuations in currency market made steel market, especially sections market full of ambiguities. As Iranian government tried to control ex-rate, many traders which had cargoes bought at higher prices stopped offering. Market trend is generally downward but transactions prices at IME are not declining. Demand level was not high at IME but Esfahan Steel sold Debar and I-beam at Rials17,500,000/mt for delivery of 2 month later compared to Rials16,840,000/mt a week ago which means 4% increase. By middle of the week resistance of sellers against any drop in prices worked and after rise in ex-rate, demand level increased.
At the moment, minimum cost price for producers would be Rials19, 000,000/mt .
Sections market is depressed due to 2 reasons as follow;
1- Ambiguities regarding ex-rate price in the market
2- High inventory levels compared to demand. Yet there are long products in the market which were purchased during 2-3 months ago at IME. These cargoes cost price was around Rials18,000,000/mt and market needs another month time to accept new prices.
At the other side state projects demand has declined and has influenced steel market harshly, if it continues would have more serious effects.
I-beam average price dropped by Rials200,000/mt during last week in Iran and debar average price declined by Rials120,000-150,000/mt. As prices were downward, demand level was generally weak. Market needs a stimulus for improvement which can be higher demand from state projects or a change in ex-rate.
Flat products
Flat products market was generally weak during week 41 in Iran. HRC 2 mm thickness started the week at Rials19,300,000/mt on truck in Anzali including 5% VAT and finished the week Rials300,000/mt higher, Any way, demand level is low as pipe and profile markets are depressed.
HRC thickness 2.5-15 mm was down by Rials200,000/mt at the beginning of the week but was again upward to finish the week at same price as beginning of the week.
HRC price of Kavian and Oxin steel mills were stable but had low demand. For thickness 12 mm or higher, HRC market is facing import market competence. During last Iranian month around 45,000 tones of HRC has been imported and more than 287,000 tones was supplied at IME. As the market was sad in current month, market inventory level has increased. As a result any improvement in prices seems impossible.
CRC and HDG markets were downward, and then started improving by middle of the week. CRC supply level is low, Mobarakeh steel prices were up by Rials1,000,000/mt during last week despite low demand level. CRC buyers prefer to by at lowest level as their cost price has increased but their products prices were not up by same level.
Traditionally Iranian flat products market is more active in second half of each year but supply level of current month has dropped especially for HDG market.
During last Iranian month around 68,000 tones of CRC was imported and IME supply level was 111,000 tones, but it dropped to 74,000 tones and import level was just 4,000 tones during last 23 days of current month which means 100,00 tones lower supply level. But peak level of consumption is second half of the year, though price of thickness 0.70-1.5 mm should rise due to low import level.
In HDG market the supply level problem is worse as supply level at IME was 15,000 tones during last month and dropped to only 9,700 tones in current month, besides import level is so limited. HDG import level has declines from 12,000 tones to 4,000 tones during last month and in current month nothing has been imported. As CRC is the main raw material for producing HDG, rises in CRC price should be expected.
Iran Steel Service Center