Billet
Iran billet market experienced unexpected fluctuations during last week. Billet size 150 mm started the week at USD774/mt on truck in Anzali including 5% VAT, but its prices was upward a day after due to higher ex-rate and lower supply level at northern ports. Market participants were expecting price trend to reverse again but higher ex-rate made price upward trend continue. By Wednesday after IME transactions closed, retail market prices became downward. Billet size 150 mm was offered at USD794/mt by Tuesday but it declined to USD782 /mt on Wednesday and USD770/mt by Thursday.
There are 2 reasons behind billet price increase during last week:
1- Higher ex-rate
2- Lower import levels during last 10 months of current Iranian year which import market share has dropped to less than 50% of total supply level. Besides, it should be noted that demand level has dropped too. If billet demand level stays stable, there would be no reason for higher billet price in coming weeks unless ex-rate or long products demand level increase. Some market participants expect import billet price to rise to USD856/mt till next 2 months, but many factors should be involved.
The positive sentiment of the market influenced billet transactions prices at IME and increased from USD642/mt to USD673/mt. It is expected that billet price at IME increase around 5% in coming 2 months.
Long products
Long products market was full of ambiguities by beginning of the week but general trend was positive. Some market participants believed that cheap cargoes at warehouses won''t let prices change, some others believed that prices will rise as some news about implementation of second phase of subsidy reform plan increased buying interest. Besides higher billet price at IME affected sections market too. Esfahan Steel mill increased its cargo of debar and I-beam price by USD4/mt compared to a month ago to USD770/mt.
When new price of debar at IME was fixed, market prices started dropping as inventory stocks at cheaper purchased prices came to market. By end of the week debar prices was heard at USD794/mt ex-work. Lower ex-rate by end of the week was involved too. Debar base price has increased by USD41/mt compared to a month ago to USD774/mt. Some market participants expect it to reach USD856/mt till end of the year ( next 2 months). They believe that ex-rate is upward and start of second phase of Subsidy reform plan is near.
But it should be noted that demand levels has not improved and the upward prices are not to real demand but higher cost price which historically will end in market depression and lower prices.
Flat products
Flat products market experienced fluctuations like other steel products. Prices were upward by beginning of the week and were downward by middle of the week onward. HRC 2 mm thickness was priced at USD880/mt on truck in Anzali including 5% VAT by Saturday and after some up and down trends, finished the week at USD929/mt. Other sizes of HRC were upward too.HRC products of Mobarake Steel mill were up by USD61/mt compared to a month ago at USD733/mt but prices started declining by last Wednesday.
Prices of flat products yet have not increased at IME. But Long products prices were up at IME. When price of debar and I-beam is USD770/mt at IME, it is not common for HRC to be USD596/mt. As HRC cost price is higher than debar and I-beam, they should be reversed. As a result, market participant expect slab and HRC price to rise at IME in coming week. Flat products import level has declined too and will pressure prices more.
CRC market was up and down during week 4 like other steel products. Unexpectedly CRC import level has increased during last month by 8000 MT to 12881 MT and Mobarake supply level at IME also was up by 11000 MT. Market participant expect a very active month as many consumers will restock in coming weeks and won''t work next month to be ready for new Iranian year.
HDG market was up by USD41/mt during week 4 in Iran. It should be noted HDG demand will rise by end of current month in Iran because of seasonal demand.
( Ex-rate: In Exchange Room: Rials24,551/USD )