Billet
Iranian billet market was downward during last Week. Decline in ex-rate and lower billet price at IME (Iran Mercantile Exchange) made billet size 150 mm down from USD775-780/mt to USD768/mt on truck in Anzali including 5% VAT. Besides, New Iranian year is coming (Begins at 21th March) and there are less than 3 working weeks, therefore demand level has dropped too. But at the moment ex-rate fluctuations has made market participants ambiguous.
During last Iranian month (20th Jan-18th Feb) around 110,000 tones of billet has been imported to Iran due to its profitability. Minimum import price of billet is about USD560/mt cfr northern ports which after custom duties, its finished price would be USD653/mt for importers and is about USD100/mt lower than domestic prices. But despite the fact that importing billet is affordable at the moment it''s becoming more limited and Iranian buyers are more interested in domestic product. Ex-rate fluctuations, shorter delivery time and possibility of buying in small tonnages have made domestic billet market better choice for Iranian buyers.
Long products
Long products market passed one of its darkest weeks in current Iranian year. Demand level has dropped significantly due to year end sentiment. Also ex-rate decline and lower prices at IME made market more pressured.
After ex-rate decreased, many traders tried to destock, so it helped prices drop more. Debar price declined from USD800/mt to USD758 /mt at IME, though it made average debar price in retail market around USD 808/mt. Buying from IME would remain up to USD12/mt profit margin for traders which means around 1.5 %. As New Year is coming, if traders buy these days, can''t sell it completely till around next 2 months, so investors are avoiding from working in steel market at the moment.
Debar purchase price at IME has experienced fluctuations currently just due to ex-rate up and downs. During last 40 days debar demand didn''t change, supply level was fixed and warehouses had enough inventory but debar price at IME was changed from USD 706/mt to USD804 / mt and then to USD758 /mt. Apparently, long products market is definitely influenced by exchange market.
Flat Products
Hot rolled coil 2 mm thickness started week 8th at USD1,000/mt with no taker, so despite limited supply, some offers declined to USD967/mt till end of the week. Import level increased just by 10,000 tones during last month and domestic supply level is limited too.
Other sizes of HRC were downward too. Domestic leader producer, Mobarakeh Steel Mill increased price of HRC class B and Class C by USD and USD despite market general trend but it didn''t help the downward sentiment as inventory level is high, demand level is low and ex-rate was declining. Although year end sentiment is making more traders eager to sell their stocks. Higher prices of Mobarakeh Steel didn''t change market sentiment and just decreased the gap between prices at IME and retail market. Any significant change in prices needs improvement in ex-rate.
CRC market was downward like HRC and experienced around USD21/mt down ward trend. Low demand and ex-rate fluctuations will influence CRC market in coming weeks till year end.
HDG market was downward like other steel products but it has supply shortage for sizes like 1.25-1.5 mm and 2 mm. If current situation continues, HDG market will face supply shortage of other thicknesses after New Iranian Year.
(Ex-rate: In Exchange Room: Rials 24,504/USD)
Iran Steel Service Center