Billet
Billet market was upward at the start of the week due to higher ex-rate. Billet size 150 mm was priced at Rials15,900,000/mt on truck in Anzali including 5% VAT by it became downward and finished the week at Rials15,500,000/mt , also some limited deals were done at Rials15,400,000/mt too. In the import market billet is offered at USD520/mt cfr Anzali port, after custom duties it will be Rials14,700,000-15,000,000/mt for the importer. Of course market participants expect prices to rise after Christmas holidays.
Billet import level has dropped significantly. During last Iranian month it was 380,000 tones but during last 20 days it was just 168,000 tones. A reason for lower import level is downward prices abroad, as some traders hope to buy billet at USD470-480/mt in coming future. The other reason behind lower billet import level is that importers are worried about their needed currency for importing. If they cannot get it from exchange room, would have to use open market ex-rate, if so importing won''t be affordable for them.
Long products
Long products market was up by Rials500,000/mt by beginning of the week but became downward very soon due to lower ex-rate and other factors. As Esfahan Steel continued offering at IME, market participants don''t expect any improvement as demand is low but supply level more than sufficient.
Supply level of mix debar at IME peaked at 116191 tones during 21 May-20 June, after that started dropping till reaching 7590 tones during last month, now inventory levels has dropped significantly and prices at the bottom, so traders have started buying during last 20 days up to 104,000 tones. It may reach last record of May-June. At the other side there are about 60 working days left till end of current Iranian year and demand level is low.
I-beam market has the same situation. Therefore, any improvement in Long products market seems impossible in coming months, unless demand level change.
Another problem which Iranian long products market was faced with during last week was cheap offer of Chinese debar in the market. The imported debars are about Rials350,000/mt cheaper than domestic material, so they are competitive.
When there is limited demand and domestic supply level is rather high, these import offers will put Iran long products market in trouble.
Flat products
HRC 2 mm thickness started week 50 with Rials19,900,000/mt on truck in Anzali but market became downward by middle of the week. It was priced at Rials19,200,000/mt at the end of the week.
Mobarakeh Steel prices didn''t fluctuate so much, but there was almost no taker for its products.
HRC thickness 2.5-3 mm is faced with demand shortage in Pipe and Profile sections but also limited supply level. For thickness 10-15 mm, market has enough inventory level.
HRC from Oxin Steel mill had a volatile week. Traders were trying to sell their inventories so market trend became negative. Market participants were expecting prices to reach Rials 15,550-15,570/mt but very slow delivery of the mill made market change again. Kavian Steel mill is not in the market at the moment, so if Oxin steel makes its deliveries more on time, it can manage the market.
CRC experienced a quiet market. Import level has dropped but prices were downward too. As import level has dropped, CRC from import market would cost up to Rials1,000,000/mt higher than Mobarakeh Steel mill but with lower quality than domestic market.
The problem of CRC market is low demand level in pipe and profile and white goods. As a result despite 35 % decline in supply level during last month, prices were downward too. Low demand has made HDG market downward too.
Iran Steel Service Center