Billet
Billet market experienced volatilities like last current weeks in Iran. Billet size 150 mm which was USD734/mt by beginning of the week, started declining and reached USD706 /mt. By Tuesday sellers were resisting against more drops, so billet price improved to USD726/mt on truck in Anzali including 6% VAT and custom duty.
Main reason behind decrease in billet price was lower ex-rate. But import level has dropped a lot, so ex-rate fluctuations should not affect billet price trend.
In domestic market billet supply level is improving. During last Iran month (22nd May- 21st Jun) around 30,000 mt of billet was imported to Iran, but around 173,000 mt of billet was supplied by Iran Mercantile Exchange at the same time. During last week around 122,000 mt of billet has been transacted at IME. When considering billet supply level outside IME and large decline of long products production level, there should be no relation between ex-rate and billet price, but the contrary is workable in Iran Market.
Long products
By beginning of last week long products market was full of fears as ex-rate was downward and reached lower than Rials29,000/USD in open market. This situation continued till Tuesday and sellers worried about more decline in ex-rate tried to destock, so higher offer level ended in lower debar price at around USD767/mt ex-works in retail market. By Tuesday ex-rate started improving and Khorasan Steel Mill''s debar was transacted at USD732/mt at IME on Wednesday and made market sentiment calm as traders became sure that billet price in retail market won''t be lower than USD775/mt. As a result transactions levels improved and helped prices to rise.
This trend continued till end of the week. Fluctuation in currency market has decreased confidence and traders are restocking less than before and prefer wait and see policy.
When demand level starts rising, market will be faced with harsh lack of inventory, so prices would surge upward on that time. Final loser would production side as mills cannot increase production level very fast in limited time due to fiscal and technical matters.
Flat products
Flat products market experienced fluctuations during last week as HRC 2 mm thickness was USD787/mt on Sunday after some drops, then started rising by Tuesday to reach USD815/mt on truck in Anzali including 6% VAT and custom duty on Wednesday. Other sizes of HRC were in the same trend, fluctuate around USD13/mt. But demand level is so low and in unlikely to improve in coming future.
CRC market fluctuated a little during last week in Iran. Despite volatilities in ex-rate, CRC market is challenging with just supply –demand problems. Some sizes like thickness 0.90 mm is in low inventory but demand level is scarce improvement in price has been around just USD20/mt.
If demand of automotive industry and white goods sections improves, market will be faced with lack of flat products and improvement of production or import level takes at least 2 months to help demand.
HDG market experienced low volatility due to low demand level. Market inventory is limited but market activity is limited too.
(Ex-rate: In Exchange Room: Rials 24,785/USD)
Iran Steel Service Center