Billet
Billet market experienced severe downward trend during last week in Iran. There are three main reasons behind these declines including:
1- Over supply; around 490,000 tons of billet has been imported to Iran during last Iranian month (22 Sep-21 Oct), but long products demand level was downward during the same period.
2- Lower demand in long products market
3- Drops in Exchange rate
By beginning of week 43, billet size 150 mm was priced at Rials20,200,000-20,300,000/mt on truck in Anzali including 5% VAT, but it dropped to Rials19,300,000/mt by end of the week. Buyers were working very cautiously. Besides, sellers were not in a hurry to destock despite downward prices.
In import market billet is around USD550/mt cfr Northern Iranian ports with prepayment. If paying by LC, it would be up to USD600/mt depending on the currency being used.
As ex-rate was dropping and import level is high, any rise in billet price seems impossible unless ex-rate changes.
Long products
Long products prices were downward during last week in Iran as expected. By Monday ex-rate dropped suddenly by Rials2,000/USD, then prices started declining. Long products prices finally finished the week at Rials1,000,000/mt lower. Demand level was dropping too. At the moment many traders prefer wait and watch the market, so downward trend will be faster. Supply level of sections at IME has increase too.
Many market players believe that long products prices has picked and by decrease of ex-rate, import parcels will have more competitiveness.
At the other side it has been seen that Khouzestan Steel billet will cost Rials18,500,000/mt for the buyer at IME including 5% VAT. Then the cost price for long products mills except Esfahan Steel would be around Rials20,000,000/mt. But there are debar cargoes in the market at lower than Rials18,000,000/mt and do not let prices increase. Though, buyers prefer wait and see policy at the moment.
By Wednesday last week, when ex-rate increases, steel market trend was positive too. Steel market is so much sensitive to ex-rate fluctuations which show ambiguities in the market. Market participants think that long products prices won''t drop more as last purchases at IME did not give traders enough profit margins.
Flat products
HRC 2 mm thickness started week 43 at Rials23,300,000/mt on truck in Anzali including 5% VAT but was declining by Sunday onward to reach Rials22,000,000/mt. Flat products import level has decreased compared to same time last year. As supply level of HRC with thickness lower than 4 mm has dropped from dometic supplier, pipe and profile producers will face difficulties for buying their needs next months. But sections prices are downward and won''t let profile price rise. Besides its demand level will decrease due to winter lower activity.
Price if HRC thickness up to 15 mm from Mobarake Steel mill was upward as its price at IME increased, nut lack of demand made price downward by middle of the week. Oxin and Kavian Steel mills were facing with lower prices due to demand shortage. Although their prices have peaked and there are cheap cargoes available in the market.
CRC price dropped by Rials500,000-700,000/mt by middle of the week after ex-rate decreased. Downward prices made limited tonnages of the material available at warehouses coming to the market. CRC average price was Rials25,000,000/mt till end of the week.
HDG market was almost stable during last week due to low supply level and also lower demand. Limited supply level of CRC has influenced HDG market too.
Iran Steel Service Center