Billet
Billet price continued downward trend during last week in Iran. Price of billet size 150 mm dropped by USD8 /mt to USD714/mt on truck in Anzali including 6% VAT and custom duties. Exchange rate was declining in first half of the week so it affected billet transactions. When ex-rate started improving by last days of the week, billet price stopped dropping but demand level didn''t change.
Sellers are resisting against decreasing billet price but market is becoming more cautious against buying billet as long products demand is at the bottom. Billet supply level is enough at the moment.
During last Iranian month (22nd June-22nd July) around 137,340 tones of billet has been imported to Iran which 101,000 tones was imported to Imam Khomeini port of southern part of the country. Market will be silent in coming days due to Holy Ramadan and religious mourning. Sections demand will drop by sure and will affect billet demand level.
Long Products
Downward trend of last weeks continued in long products market during week 30th . Billet price has reached USD 698/mt including 6% Vat and custom duty in Imam Khomeini port and debar price in Ahwaz retail market was USD771/mt. When the gap between billet and debar price is just USD73/mt, surely many traders will try to destock to prevent more losses. They won’t look for stockpiling at the moment. Supply level is higher than demand and new offers at IME are not interesting for buyers any more.
Billet price of Khouzestan Steel Mill was transacted at base price of USD674/mt at IME on July 17th, and finished price after 6% VAT would be USD714/mt. For converting this billet to debar we should add at least USD 4/mt as transport cost to nearest mill and after USD61/mt as converting cost , final price of debar for a debar producer would be USD779/mt. But as we see in retail market it is being offered at USD766 -775/mt by some traders.
Therefore it is obvious that debar price has bottomed. It needs some declines in billet price which seems impossible at the moment. Firstly it should be noted that billet import level has been limited and the inventory at southern ports are for the orders done at least three month ago. Secondly, scrap generation has declined due to economical sadness, though domestic billet price won''t drop too.
There is no hope of improvement in long products market at the moment as market is almost inactive in coming days and would be in wait and see policy till new president starts working. For better prices we need also lower production level. As a reason market participant prefer waiting till holy month of Ramadan finish to have a clear picture of market trend.
Flat products
Low demand and avoiding new transactions was the general trend in flat products market last week. As the market would be almost inactive this week, buyers were not interested in any activity. HRC 2 mm thickness dropped from USD766/mt to USD758/mt on truck in Anzali including 6% VAT and custom duty.
Price of HRC with thickness up to 15 mm from Mobarakeh Steel Mill declined by up to USD12/mt due to low demand. Price of HRC products of other suppliers decreased by USD8/mt. It is clear that prices have bottomed and traders are not interested in buying from mills.
CRC market was quiet as demand level is low and summer stoppage of some mills has begun, besides some mills were offering in the market due to lack of liquidity and tried to sell inventories. These factors influenced market sentiment and made prices downward. Price of some sizes of CRC is lower than ex-work price of Mobarakeh Steel and there is no hope of improvement in coming 2 weeks.
HDG market was quiet like current weeks, prices didn’t change significantly but supply level of some sizes has bottomed.
Market participants are hopeful about better market sentiment when presidential transfer will be done in near future and activity of steel market will increase by then.
(Ex-rate: In Exchange Room: Rials 24,785/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.
Iran Steel Service Center