Billet
Billet price was almost stable during last week in Iran despite fluctuations in exchange and long products markets. Billet size 150 mm was priced at USD707 /mt on truck in Anzali including 6% VAT and custom duty and domestic product was offered at USD699 -703 /mt ex-work. Billet import level has dropped significantly during two months ago and was just around 32,000 -36,000 tones.
Importing billet at USD540/mt cfr Iranian ports is profitable for Iranian traders when using ex-rate of Rials 25,000/USD, but at the moment there are limitations for transferring currency. If this problem be solved, billet price will decline after import level improves.
Domestic producers are trying to increase billet production level, so if import level increase and prices drop, it would damage domestic production again. It seems that government policy is to avoid downward trend in billet market at the moment. Holding billet price stable will increase production lines in domestic market. Billet is an important raw material for steel making, so our domestic market need more production level for further improvements.
Market participants expect billet market to be stable in coming weeks as current policy is resisting against any drop.
Long products
Long products market was downward during last week in Iran as ex-rate in open market was declining, also some bankruptcies between traders made market sentiment ambiguous. Debar diameter 14-25 mm was offered lower than USD768/mt ex-warehouse in Tehran.
Low liquidity, scarce demand, and market worries about lower prices in the future, all made retail market price by USD4/mt lower than IME transactions price.
Market participants were divided in their opinions regarding market future, with two different views as following:
First scenario thinks that mills will have to decrease prices as demand is scarce. If this happen, won''t help demand to improve till next 2 months as it was experienced at the same time last year. Though, long products prices will be downward as consumption level is limited.
Second scenario expects stable prices, but it needs domestic mills production level at the bottom. When producers resist against lower prices by declining production level, market will be stable.
Steel market Situation won''t change in coming days as market will wait for our government authorities'' come back from UN General Assembly at New York.
Flat products
HRC 2 mm thickness was in a downward trend till middle of the week to reach USD744/mt on truck in Anzali including 6% VAT and custom duty, then sellers stopped offering and it help prices to improve by USD4/mt till end of the week.
Price of HRC products from three main domestic producers Mobarakeh Steel, Oxin Steel and Kavian Steel Mill dropped by USD4-8/mt depending on thickness. Demand level has bottomed, but as these producers are controlling market supply level, harsh declines in prices is not expected.
CRC market was quiet as ex-rate dropped and demand level is scarce, its price dropped by USD20/mt in some cases. HDG market was also depressed and demand level at the bottom.
Flat products market is waiting to see if market sentiment will change in coming week or not.
Iran Steel Service Center
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(Ex-rate: In Exchange Room: Rials 24,732/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.