Billet
Billet market was upward during last week, size 150 mm was up to Rials 16.5 m /mt by middle of the week, and then suppliers stopped offering.
The upward trend was due to :
1- Lower billet import level, which has dropped by more than 50% during last quarter in Iran. Total supply level of billet from import market and IME has dropped from 622,000 mt to 344,000 mt during the same period. Market players expect the downward trend in import market to continue.
2- Higher prices in long products market has helped billet demand improve a little.
3- Higher billet prices in global markets.
The upward prices in billet market can be affected by seasonal factors beside higher scrap price. It is expected continue till first week of February. During last week CIS billet was transacted at USD545/mt cfr Anzali port and now suppliers are asking for USD560-565/mt cfr Northern ports.
Main reason that domestic producers are not much eager to offer is global upward prices.
4- At the moment the procedure for importing billet to Iran has became hard and time consuming. As a result many importers are less interested in purchasing billet as they have lost the confidence to market. But it is a chance for domestic producers to increase their supply level. It is expected that new projects will add to Iran billet production capacity by at least 2 million tones by next Year.
Long products
Long products market experienced some improvements in market sentiment during last week as buyers became interested in purchasing. It has been around 4months that long products prices have been downward and inventory levels have reached the bottom.
Market participants generally agree that current prices are the bottom, so prices were upward during last week. Traders were yet cautious in buying.
Higher price expectation in last 2 month of the year ( 20 Jan – 20 Mar) , increased demand level and some market participants think base price of debar will rise to Rials18 m/mt or higher. Current situation in billet market has made this expectation more possible.
Generally many market participants believe the best choice is moving cautiously.
Flat products
HRC 2 mm thickness was upward during last week in Iran. Its price increased by up to Rials1.5m/mt to Rilas21.5 m/mt on truck in Anzali including 5% VAT by end of the week and sellers were not in a hurry to transact. Iranian HRC market is heavily depended on import level which has dropped harshly during last 4 months. The only reason that supply shortage has not affected prices dramatically is that demand level has dropped especially from government housing projects.
Supply level is decreasing and HRC 2 mm thickness price has increased by USD20/mt compared to beginning of January, so if the situation continues prices will increase more.
Other sizes of HRC experienced about Rials100,000 /mt rise and average price of thicknesses 8-12 mm were Rials16.3 m/mt on truck including 5% VAT in Esfahan market. Domestic producer " Mobarake Steel mill " has decreased its supply level, so it can increase prices in coming weeks. The mill''s supply level at IME was around 40,000 tones up to reach 308,000 tones during last Iranian month, but again dropped to 208,00 tones during first 20 days of current month. HRC thickness 15 mm or higher from Oxin Steel mill experienced Rials100,000-200,000 /mt rise.
Slab was transacted at IME at Rials13.12 m/mt , compared to Rials 12.5 m/mt for last transactions.
The increase of more than Rials600,000/mt of raw materials at IME influenced market trend directly.
Supply level of HRC thickness 30 mm or lower from import market is very low and has affected domestic prices too.
CRC price increased by Rials 100,000-300,000/mt due to low import level and expecting market improvement but just for seasonal factor not real demand. HDG market was almost stable due to stable demand, although domestic supply level has increased by 1000 tones during current month.
Iran Steel Service Center