Billet
Billet market was almost silent during week 16th in Iran. Prices were downward beginning of the week due to long products market sadness and lower ex-rate. Billet price finished the week at USD703/mt on truck in Anzali and USD686-687/mt at Imam Khomeini port including 6% VAT.
Transactions'' level is limited due to demand shortage. The main reason behind this situation is liquidity problem of steel mills. Besides, import regulations have decreased import level and domestic billet production is taking more share of the market.
Khouzestan Steel mill sold its billet at USD 634/mt during last week, the same as the price at end of last Iranian year (Before March 21th ). During last month around 170,000 mt of billet has been transacted at Iran Mercantile Exchange and around 62,000 mt has been imported.
Long products
During last week, downward trend of long products market made market participants nervous. This trend was expected but lack of demand has made prices coming near purchase price from mills. Khorasan Steel offered debar at USD721/mt last Wednesday which would be USD765/mt after 6% VAT for buyers. It was around USD 3/mt higher at the same day in retail market. Long products from other suppliers had the same trend during last week.
From 3 month ago, declines in long products prices made investors out of this market, though despite resistance of producers against any decrease, there is no sign of improvement in the market, as demand level is so down.
Profit margins are so much limited for both producers and traders and there is no hope in the future. As a result, market participants prefer wait and see policy and buy at the possible lowest tonnage for their immediate needs.
Flat products
2mm thickness HRC was transacted at USD905/mt on truck in Anzali including 6% VAT at the beginning of last week. It decreased around USD16/mt during the week and finally finished the week at USD897/mt.
Other sizes of HRC had downward trend due to demand shortage. Besides, Mobarakeh Steel mill is supplying to the domestic market at high tonnages. It sold its HRC class C at USD657/mt at IME and retail market price dropped to USD723-727 /mt.
Excluding premium, traders can make profit of USD 30/mt which would mean 2% profit margin per month. But if traders invest their money in corporate bonds, then would take more profit, so steel market is not an interesting target for investors.
CRC market was downward too. Its price declined by around USD40/mt during the week mainly due to low demand level. We are in the second month of New Iranian Year but it seems that many producers yet have not started working actively after Holidays.
(Ex-rate: In Exchange Room: Rials 24,755/USD)
Iran Steel Service Center