Billet
Billet market experienced a hard week in Iran. Price of billet size 150 mm dropped by Rials600,000/mt to Rials15,200,000/mt on truck in Anzali including 5% VAT.
Reduction of billet price has reasons such as:
1- Declining demand of long products
2- Devaluation of USD against Rials
3- More pressure from government for declining domestic billet price at IME
It seems that billet price at IME has dropped by 14% during 18 days as on 27th October it was Rials17,460,000/mt and on 14th November reached Rials15,000,000/mt at IME.
There are 2 different views in the market:
One of them says that this price would be the bottom and base price for billet and won''t drop more. They believe that imported billet final price is at least Rials16,400,000/mt after duty and other costs, so when domestic billet is Rials15,000,000/mt, import market would stop activity, as a result domestic price will rise again.
The other view says that Iranian authorities are trying to decline billet price to as low as RIals13,000,000/mt at IME. State projects'' sections demand has dropped significantly, so billet demand has decreased too. About 50,000 tones of billet was offered at IME, but only 10,000 was purchased.
Supply level of billet at IME and import market together has dropped by 30% compared to last Iranian month, but demand level has declined more, though billet market need at least 1 month to be balanced.
Long products
Long products market was so depressed during last week in Iran. Debar price dropped from Rials18,500,000/mt to Rials16,200,000/mt in Tehran retail market. In Ahwaz market debar price decreased from Rials19,300,000/mt to Rials16,800,000/mt and in Esfahan from Rials19,400,000 to 17,200,000/mt including 5% VAT.
Debar traders in Tehran worried about market stoppage in coming week for religious mourning ceremonies tried to destock their warehouses to increase cash flow. But as demand level was low this policy made prices decline more.
Demand level has declined, both end users and public projects have lower demand, besides supply level has dropped too. Debar supply level at IME declined by 82% compared to last Iranian month and debar and I-beam supply level dropped 57%. For I-beam alone supply level at IME declined by 100%.
With downward trend of long products market, steel mills will have many problems due to cash shortage.
Flat products
Flat products market experienced downward trend due to lower demand and ex-rate reduction. Though, prices were declining significantly. Government trying for lowering slab price at IME was successful as it dropped 15% compared to 2 weeks ago to Rials12,500,000/mt.
The bottom price is not clear yet, but after lower price of slab at IME, big traders stopped resisting against declining flat products prices by end of the week. Therefore in coming days flat products prices may experience a downward trend again.
2 mm thickness HRC price declined from Rials19,600,000/mt to Rials17,500,000/mt on truck in Anzali. Import price is USD600 cfr northern ports, so cost price for importer would be at least Rials16,500,000/mt with ex-rate from exchange room. Around 226,000 mt of HRC has been imported in current Iranian month, compared to 450,000 mt of last month.
In CRC market, price of thickness 0.60 or higher, dropped by Rials3000,000/mt to Rials 21,000,000-22,000,000/mt including 5% VAT. But cost price for importers is Rials22,000,000/mt for USD650/mt cfr northern ports. Overall supply level of CRC in Iran dropped from around 136,000 mt to 65,000 mt compared to last month.
In HDG market, average price has dropped to Rials 25,000,000/mt on truck in Anzali including 5% Vat, but yet has no buyer.
Main problem of Iran flat products market is depressed market of white goods as their production level has declined.
Iran Steel Service Center