Billet
Iran billet market was downward during last week and price of size 150 mm declined from USD734/mt to USD722/mt on truck in Anzali including 6% VAT and custom duties. Main reason behind this downward trend is lack of demand. Besides, exchange rate was downward during last week and affected market sentiment.
There is no confidence in future of billet market at the moment. Traditionally Iran imports billet from CIS countries more than other suppliers but due to sanctions against Iran the situation has changed. Around 51,365 mt of steel billet has been imported to Iran from South Koreas to southern ports during current Iranian month and just 27,125 mt of billet from CIS to Northern ports. Korean product is at least USD50/mt more expensive than CIS. Also it should be noted that demand level is so limited and domestic billet supply is enough at the moment.
Long products
Long products market experienced a quiet week in Iran. Buyers were not interested in purchasing Wait and see policy was the common trend. Market participants believe that current situation won't improve at least till new president start working. Many governmental projects have stopped buying to see what will happen when new president come to work. As a result, inventory level of warehouses is at the bottom and also production level is low.
By middle of last week, when ex-rate was downward and billet price declining, some traders in long products market started buying but at the minimum level for their immediate needs. Just some sizes of I-beam experienced some improvements but dropped again by end of the week.
Average price of debar in Esfahan market decreased from USD791 /mt to USD789 /mt . Also price of debar in Ahvaz market dropped by USD4/mt to USD795/mt.
Generally, in Holly month of Ramadan demand level drops, but this year other factors such as summer time and new president have increased the pressure on steel market.
If billet price resists against downward trend, long products prices would be stable too, but if billet price drops to lower than USD706/mt in Anzali port, long products market will experience significant declines in prices.
Flat products
HRC 2 mm thickness dropped by USD24/mt to USD776/mt on truck in Anzali including 6% VAT and custom duty. Sanctions against Iran have not affected this product market and traders have good profit margin when importing HRC 2mm thickness from South Korea at USD620/mt cfr Imam Khomeini port. Therefore HRC import level has increased from 27,000 mt during last Iranian month to 72,000 mt in first 3 weeks of current Iranian month (22nd June-12th July).
HRC 2.5-15 mm thickness from domestic supplier Mobarakeh Steel Mill was downward in price by USD16/mt. Prices of HRC production from other suppliers were downward too. Prices in retail markets are near ex-work prices and profit margins have dropped significantly. Buyers are not interested in HRC market any more.
In CRC market, despite supply shortage of some sizes, prices are down as demand is low. HDG market also experienced around USD20/mt decline due to lack of demand.
Iran steel market is facing with demand shortage at the moment. Significant improvements in prices won't be seen unless demand level increase.
(Ex-rate: In Exchange Room: Rials 24,792/USD)
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Iran Steel Service Center