Billet
Billet size 150 mm was being offered at USD774/mt by beginning of last week on truck in Anzali including 5% VAT. After ex-rate started rising, billet market was affected and was priced at USD790/mt at Anzali port and USD770/mt at Imam Khomeini port and then market was stopped. By Monday, market was full of ambiguities and a day after offers were disappeared from market.
By the rise in ex-rate, long products prices were upward too and influenced billet market. Nevertheless, billet market trend was not clear by end of the week.
The gap between billet price and finished products has increased. Latest sales price of billet at IME has been USD708/mt but debar average price is about USD840/mt and the gap has been about USD132/mt.
Market participants expect long products prices to drop as it seems that it has peaked, so billet price rise at IME would be unlikely.
But we have 3 working weeks till end of current Iranian year which will finish at 20th March 2013 and anything can happen to increase billet price by USD40/mt.
Long products
Long products market is experiencing a horrible time in Iran. Debar average price in Esfahan market increased from USD819/mt to USD860/mt including 5% VAT and custom duty and it changed from USD817/mt to USD846/mt in Ahvaz market in south of Iran. But the upward trend was against market participants expectations which were waiting for drops all days last week.
The upward trend was just due to higher ex-rate. Many traders are worried about their inventory levels. They have debar available with different prices from USD713/mt to USD 827/mt at their warehouses.
As production level of domestic mills is rising, if ex-rate stops upward trend long products prices may drop.
Some market participants do not expect long products prices to decline as year end is near and there is some news about possible implementation of second phase of subsidy reform program. But it should be noted that Iran's steel market problem is not just finished price of products and many other problems are affecting the market which the most obvious one is consumption level which is declining and there is no hope for its improvement as Iranian New Year is coming.
Flat products
Flat products market was upward during last week in Iran due to higher ex-rate and traders' restocking. HRC 2 mm thickness started the week at USD925/mt and finished it at USD998/mt or more on truck in Anzali including 5% VAT. Traders preferred to stop dealing as ex-rate was upward and this product is dependent on import market. HRC with thickness up to 15 mm by Mobarakeh Steel mill was about USD774/mt or more ex-work. Slab price increased by USD29/mt at IME and reached USD535/mt. So it changed the base price of HRC to more than USD815/mt. By end of the week there was no seller in HRC market with any clear offer price available in the market.
CRC market was upward in which for some sizes more than USD41 /mt increase was experienced. The only reason was again ex-rate surge. The fluctuations have made many traders worried. The ex-rate fluctuations are making value of their products less. Final consumers see that they cannot pass these rises to their products prices, so prefer to wait and see, and produce at the minimum level.
( Ex-rate: In Exchange Room: Rials 24,547/USD )