Billet
Currently imported billet price in Iran do not follow changes in long products market, but it has been influenced by changes in exchange market. Last Saturday, billet size 150 mm was priced at USD836/mt on truck in Anzali including 5% VAT, but after drops in ex-rate, billet price also declined to USD824/mt and finally finished the week at USD767/mt on truck in Anzali including 5% VAT.
Domestic billet price trend was the opposite of import market. Billet price from domestic mill Khouzestan Steel mill has increased by USD37/mt around 4.5% compared to around a month ago to USD711/mt ex-work. After including VAT, latest sale price of billet at IME has been USD747/mt. But yet it has a gap compared to USD775/mt of imported billet price.
During first half of current Iranian year, authorities were trying keeping billet price at IME near import market level or a little more to help import market and supply level be balanced, but as import level has been declining specially during 2 months ago, domestic billet is getting more strength in Iran steel market and long products producers are paying more attention to purchases of billet at IME. It is expected that domestic billet price to reach near import prices till year end (next 5 weeks).
Long Products
Long products market was quiet during last week in Iran. Deabr was offered at USD730/mt by beginning of the week at IME but average sale price at retail markets was USD836/mt. So demand level for buying at IME increased to 180,000 mt , but finally limited tonnage was transacted. By end of the week the same material was offered at USD803/mt at IME which after 5% VAT would be USD844/mt. As a result long products market became depressed and traders were no longer interested in buying from IME.
At the moment warehouses are full of long products purchased at cheap prices during last months, so market would not improve till these stocks be finished unless ex-rate increase again which is not unlikely.
It should be noted that market participants do not expect long products prices to drop significantly as billet inventory level has reduced and its price has rised from USD640/mt of 4 month ago to USD710mt in current month. Secondly billet price won''t drop as importing is not an easy work these days. The other factor is possible implementation of second phase of Subsidy Reform Plan which will increase finished prices of steel products.
Flat products
Flat products market was downward during last week in Iran. 2 mm thickness HRC was priced at USD1007/mt on truck in Anzali including 5% VAT at the end of the week compared to USD1036/mt of last week. This material is also being offered at Southern ports so the availability does not let its price to improve. Mobarakeh Steel increased its HRC sale price at IME by USD29/mt but cheap purchases of last months available in the market, made prices downward. Ex-rate decrease also affected flat products market too.
HRC thickness 15 mm or higher experienced a stable week. Low supply level of domestic mills increased the expectations of higher prices in the market but by middle of the week some news regarding increasing supply level of Oxin steel made market quiet and market participants preferred waiting for coming week. Last week slab price at IME increased by USD11/mt compared to a month ago. At the moment flat products prices are nearing the peak and the gap between ex-work prices and retail market has increased traders'' margins.
It is expected that traders pay more attention to import market, so it may decline prices, but also ex-rate is important.
CRC market was downward due to;
1- Lower ex-rate
2- CRC price has peaked during current weeks.
HDG market is in supply shortage for some sizes and coming months will be peak season of HDG consumption, so an improvement in prices is expected.
(Ex-rate: In Exchange Room: Rials 24,525/USD)
Iran Steel Service Center