Billet
Billet market was upward during last week in Iran. Size 150 mm was priced at Rials15,200,000/mt , up by Rials400,000/mt on truck in Anzali including 5% VAT.
Reasons behind the rise in billet price include:
1- Higher ex-rate until reaching almost Rials30,000,000/USD.
2- Small improvements in long products transactions level.
3- Resistance of domestic producer against price volatilities. Khouzestan Steel base price for billet stayed at Rials15,000,000/mt at IME
At the moment buying from domestic producer would cost a buyer almost Rials15,750,000/mt including 5% VAT. Besides, import billet price is USD550/mt cfr Iranian ports and after Rials1500,000/mt custom duties, final price would be Rials 15,250,000/mt in Anzali. So it is apparent that billet import price has reached the bottom.
At the moment long products demand level is limited so has affected billet market negatively.
Three main factors influencing billet market at the moment includes:
1- Low sections demand level, consequently billet
2- The obligation for prepaying 135% of payment amount to the banks when importing.
3- Low billet price ad market doubts against improvement in the near future.
At the moment, Iranian buyers prefer domestic purchases as they can buy in small parcels, so they need lower liquidity and would deliver it faster to minimize volatilities in prices.
Domestic billet price was Rials14,600-14,800/mt ex-work during week 49.
Market participants expect billet price to increase in coming month as supply level will dampen, but also it depend on more activity in long products market.
Long products
Long products market started week 49 with an optimistic trend, but by middle of the week it changed to market depression with no activity.
Domestic mills were faced with no interest in buying at IME as their final prices were higher by Rials300,000/mt compared to offers at retail market.
Some market participants believe that debar base price should drop to Rials15,000,000/mt despite current Rials16,500,000/mt. But it means that domestic billet price should be by Rials2,000/mt lower at Rials13,000,000/mt, which means import price should decline to USD470/mt cfr Northern ports. It is unlikely that in coming months prices will reach this level as last quarter of each year, long products market activities increase and supply level in global market is limited in January. As a results some views believe that bottom price for sections should be Rials17,500,000-18,000,000/mt.
If ex-rate stays stable and big mills resist against any drop in prices, Iran long products market will be balanced in coming 2 weeks. At the moment any small change in ex-rate affects steel market severely and directly.
Flat products
Hot rolled coil thickness 2mm experienced around Rials1,000,000-1,100,000/mt increase in price to reach Rials18,900,000-19,000,000/mt on truck in Anzali including 5% VAT. Mobarake steel mill supply level is limited at the moment but depression of demand has led to limited transactions levels.
For HRC thickness 15 mm or higher import level is limited, so prices were stable despite low demand. Oxin Steel Mill was successful to take market share with price of Rials14,500,000-14,900,000/mt . Some market participants are waiting for higher prices due to limited import level but others think that demand depression don't let prices rise, which seems to be a correct expectation.
CRC price was upward like other steel products during last week and increased by Rials400,000/mt but due to low supply level and higher ex-rate, not better demand level.
HDG market improved and prices were up by Rials200,000-300,000/mt for some sizes but demand level was almost scarce.
If ex-rate drops, CRC and HDG price will decline too.
Iran Steel Service Center