Billet
By beginning of last week, billet price was downward in Iran. Sellers were offering billet size 150 mm at USD708/mt on truck in Anzali including 6% VAT and custom duty, but buyers were asking for USD704/mt or lower. As market became more worried about possible military attack of USA against Syria, exchange rate increased and made sellers out of market. Though, billet price was upward till end of the week to around USD712/mt including 6% VAT and custom duty. Transactions levels were not significant and buyers were moving cautiously as long products demand level has not improved.
Billet market was upward in global markets before increasing tension regarding possible military attack against Syria but this trend has been stopped. Billet is tradable at USD540-550/mt cfr Northern Iranian ports but time consuming procedures for opening LC and payment terms has made both Iranian buyers and foreign sellers not interested in dealing. As a result, billet import level is declining, but domestic billet producers now have a chance of improving their production level.
It should be noted that billet demand level is downward in Iran, as around 977,000 tones of billet had been transacted at Iran Mercantile exchange during first 5 months of last Iranian Year ( 21 March-22 August 2012 ) but at the same period of current year it has been reduced by 12% to around 859,000 tones. As scrap price is high, profit margin in billet market has reduced too.
Long Products
During first two days of last week, Iran long products prices were downward and many market participants were on summer vacations. By Tuesday when ex-rate improved, sections demand level increased. Traders had low inventory but preferred buying cautiously at lowest level. As more transactions were done, long products prices improved by USD8/mt. But deals were not based on real demand, so when prices improved market became silent. By Wednesday prices rose by USD2-4/mt with nobody interested in buying.
At the moment there is no interest in investing at steel market. Downward prices have increased number of buyers which are losing money and there has been a bankruptcy recently. Some participants believe that more financial problems are on their way to steel market, so investors are out of steel market.
During last week there was no interest in buying debar from IME as its finished price would be higher than retail market prices.
At the moment long products market sentiment is not interesting at all. There are two choices for some changes in market sentiment:
1- Prices should decline at IME, which needs lower price of billet form Khouzestan Steel Mill as a major supplier. If this happen, market confidence would disappear and many traders will lose money.
2- Retail market prices should improve, which need better demand level
Flat products
By beginning of week 36th, 2 mm thickness HRC was transacted at USD753/mt on truck in Anzali including 6% VAT and custom duty. By middle of the week, price was upward and finished the week at USD777/mt. A flat products trader was faced with bankruptcy last week, which will probably change price trend in coming days.
HRC thickness 3-15 mm from domestic producer Mobarakeh Steel was upward by USD4-8/mt.
Many traders have stopped working at the moment as market situation is ambiguous and they would not make much money when buying from Mobarakeh Steel Mill.
Price of HRC thickness 15 mm or higher from domestic producers Oxin Co and Kavian Co have decreased as import level increased and demand is scarce.
CRC market was quiet. Demand level is low and import level has dropped too. HDG market was upset despite low supply level, as previous weeks.
Many market participants are hopeful that government will try to increase opportunities for steel export. This will increase demand and surely would improve market fundamentals.
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(Ex-rate: In Exchange Room: Rials 24,846/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.
Iran Steel Service Center