Billet
Billet price was downward during last week in Iran as expected but the downward trend was limited. Billet size 150 mm decreased by USD8/mt to USD681/mt on truck in Anzali including 6% VAT. Slow downward price was due to lower import level and limited supply.
Domestic producers were offering billet size 150 mm at USD685/mt and size 125 mm at USD661/mt or lower including 6% VAT. Khouzestan Steel Co sold around 63,000 tones of billet size 150 mm at IME (Iran Mercantile Exchange) at USD617/mt ex-work which was around USD32/mt lower than latest deal at IME. This transaction price would be USD655/mt after 6% VAT.
At the moment billet import level is limited and demand is at the minimum level. Besides, scrap price won''t drop significantly as scrap collection will be lower in winter and supply level will decrease. As a result a significant decline in billet price is not expected. Last Monday it was announced by a company that it would offer HMS1 in IME at USD543/mt, if this transaction be finalized billet price will stay stable.
If current situation continue, billet import will be stopped. As domestic production of billet has increased, producers need more support from banks for satisfying their raw materials needs from domestic market and avoiding more import.
Long products
Long products traders were eager to destock during last week in Iran due to worries about more declines in prices. Average price of debar size 8-32 mm dropped by USD8/mt to USD736/mt ex-work in Ahwaz market. Price of I-beam size 14-18 mm also dropped by USD7/mt to USD734/mt ex-work in Esfahan market. Meanwhile, buyers were generally holding wait and see policy.
There was some news in the market that Esfahan Steel Co has decided to reduce sections production and increase billet supply level, some other mills are also thinking about it. This news increased the possibility that prices have reached bottom but yet some market participants are worried about more declines in prices as it was experienced during third quarter of last Iranian year.
As future market trend is not clear at all, market participants prefer avoiding high inventory level. If prices continue declining it won''t be more than USD12/mt in near future. As the mills have enough inventory for at least a month, prices won’t increase definitely.
Flat products
Price of hot rolled coil 2 mm thickness was almost stable at USD771/mt on truck in Anzali including 6% VAT. HRC thickness 2.5-6 mm was in low inventory but their prices didn’t change. Price of HRC thicknesses 8-15 mm were Downward by up to USD8/mt during the week.
Price of HRP from Kavian Co and Oxin Co experienced around USD8/mt decline in price. HRP demand level is low and competition of 2 producers has made prices downward, otherwise due to low import level and supply shortage price of HRP should be stable.
Some sizes of CRC especially thickness 0.80 and 0.70 mm are facing lack of supply, but low demand didn''t let prices improve. CRC import level has dropped to 3600 tones/month and is expected to decrease more as demand level is so much limited. HDG market was also stable due to low demand and limited supply level.
(Ex-rate: In Exchange Room: Rials 24,957/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.
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Iran steel Service Center