Billet
Billet price fluctuated upward during last week, but finished the week at same price as beginning of the week. Ex-rate and also long products market fluctuations influenced billet market.
By beginning of the week on Saturday, billet size 150 mm was offered at USD786/mt on truck in Anzali including 6% VAT and custom duties. Ex-rte was upward also debar market was in a positive sentiment, so billet was priced at USD 798/mt on truck including 6% VAT and custom duty on Monday.
After debar sale price dropped to USD 847/mt ex-work, billet price started decreasing and buyers preferred working very cautiously. The downward trend continued till end of the week.
Billet import level to Iran is declining, but as domestic supply level is improving, it won't affect the market seriously in coming future. Billet import price is USD510/mt cfr Northern ports at the moment and by open market ex-rate it would cost USD 847/mt for the importer, which is definitely not affordable. Billet import level during last Iranian month (21st April- 21st May) was 68980 tones but during last 3 weeks of current Iranian month it dropped to 25504 tones. It should be noted that market prices have not responded to the drops in import level so harshly.
Long products
Long products market was upward by beginning of last week as rise in offered price at IME ( Iran Mercantile Exchange) affect retail market immediately. When debar diameter 25 mm was transacted at USD776/mt ex-work at IME, retail market price changed to about USD887/mt. In first 2 days of the week price of angle, I-beam and UNP increased like debar but limited demand level didn't let market participants accept the surge in prices. When ex-rate started decreasing by Monday, long products started decreasing and finished the week at average price of USD847/mt.
Prices were upward but transactions levels were limited as supply level was low. It seems that prices were being fixed as base price of coming Iranian month. Transactions were mainly for restocking and end users were not active.
As scrap price has increased, market participants expect billet price improvement at IME in coming days will influence long products market too. Some participants are waiting for USD875/mt or more for debar in coming days.
At the moment Iranian steel mills are working with the lowest production capacity and surge in prices is due to higher costs, not better demand. In a situation that Turkey is experiencing political unrests and has lower competitive strength in global markets, Iranian mills should increase their export production capacities.
Flat products
Flat products market was silent during last week and didn't experienced fluctuations like long products market. HRC 2 mm thickness was prices at USD915/mt on truck in Anzali including 6% VAT and custom duties and finished the week at USD907/mt with little decrease.
HRC thickness 2.5-12 mm increased by up to USD10/mt but decline again by end of the week. HRC with thickness higher than 15 mm fluctuated by 4-6/mt and has no demand.
Demand level is low, but import parcels are competing with domestic products. Supply level of Mobarakeh Steel Mill has dropped from 408,000 tons of last month to just 204,000 tons during first 21 days of current Iranian month, but market didn’t respond to this decline as shortage of demand concerns.
Market participants believe that HRC price should rise in coming weeks. They ask why slab price is cheaper than billet by USD81/mt and HRC average price is lower than USD806/mt and debar higher than USD847/mt when real trend of the market should be reversed.
CRC market experienced decline for some sizes. Some sizes are in low demand and also low supply level. Some sizes are being dealt at price of I-beam or debar. For instance CRC 0.70 mm thickness from Mobarakeh Steel Mill is offered at USD907/mt ex-work but average price of I-beam size 14-18 mm is USD961/mt, when base price of CRC should be at least USD8/mt higher than I-beam. Low demand especially in white goods section is the main reason behind it.
HDG market was stopped. Demand level is at the lowest and some sizes are in supply shortage .
(Ex-rate: In Exchange Room: Rials 24,797/USD)
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Iran Steel Service Center