Billet
Billet market experienced a stable week despite sadness of long products market. Releasing imported billets from ports was faced with some delays, so billet market was in low supply. Billet size 150 mm was priced at USD694 /mt on truck in Anzali including 6% VAT at the beginning of the week, but started rising from Monday onward due to ex-rate fluctuations. It finished week 17th at USD706 /mt.
At the moment imported parcels are not being transacted much and domestic billet is more interesting for buyers as is not very different from imported one in quality. Khouzestan Steel mill has increased production level and is supplying domestic market frequently, so lower import level has not affected the market. During last working month around 81,311 tones of billet has been imported to Iran, and Khouzestan Steel has offered more than 204,000 tones of billet at IME during the same time. There are other producers around the country which their production level won''t be lower than import level.
Sanctions against Iran has made steel market slump and inactive but at least has helped domestic production. Domestic mills now have a chance to increase quality and quantity of their billet.
Long products
Long products market started week 17th inactive and prices were almost stable. Transactions levels were limited till middle of the week and after the ex-rate increased, demand level improved a little.
Long products market was stable as:
1- Prices have bottomed and there is no space for further cuts. Minimum domestic billet price was USD678/mt ex-work and average long products prices after production costs and VAT, won''t be lower than USD767/mt ex-work.
2- There is almost no demand in long products market. Construction projects have no significant demand, so trader prefer decreasing transactions'' level .
Market participants are waiting for higher prices in long products market, but low demand level and controlling inflation till Presidential election ( 14th June, 2013) by Iranian government, won''t let prices improve significantly.
Flat products
HRC 2 mm thickness has passed an upward week. It was priced at USD896/mt on truck in Anzali including 6% VAT at the beginning of the week but finished the week at USD40/mt higher. The reasons behind the upward price are higher ex-rate by middle of the week and the problems for releasing cargoes from ports.
HRC with more than 2mm thickness was downward. Mobarakeh Steel Complex was offering at stable prices like last Iranian year, supply level increased and prices were declining. Traders have very limited profit margins in flat products market as competition has increased but there is no demand.
CRC market was quiet as demand level was limited. At the moment Mobarakeh Steel Complex is running the market and imported parcels cannot compete with it. Though, Mobarakeh Steel has become the only pricing power. Automobile sector and white goods have very limited demand, so CRC market won''t improve as much. Profit margins are every limited and traders are not interested in more investment and buying at high tonnages from the market.
HDG market has shown some signs of improvement as the time for its seasonal pick have arrived but it is mainly due to low supply level not higher demand. Some sizes like 2 mm HDG are in supply shortage. If the slump in CRC market continues, HDG price would be stable too.
(Ex-rate: In Exchange Room: Rials 24,780/USD)
Iran Steel Service Center