Billet
Billet market was stable during last week in Iran, but market participants expect prices drop. Supply level of billet size 150 mm was limited at Anzali port. It was priced at USD608 /mt on truck in Anzali including 6% Vat but no deal was finalized. Billet size 120 mm at import market was offered at USD596 /mt on truck in Anzali including 6% VAT and limited tonnage was transacted. Domestic production size 120 mm declined by USD8 /mt to USD563 /mt ex-work including 6% VAT and some mills were offering at USD559 /mt ex-work including 6% VAT.
Khouzestan Steel Co offered billet size 150 mm at USD563 /mt excluding VAT at IME but purchased cargoes were limited. Market participants expect around USD40/mt decline for the mill billet production , if so it may help market stabilize. But this reduction will influence import market and other markets too especially scrap market and small steel mills.
Besides, steel market expect energy price increase in coming Iranian year, if so it will increase production costs, tough surely prices would rise then. But at the moment year end sadness in the market and liquidity shortage force steel mills to reduce production and also prices as demand is low.
Long products
Long products market was downward during last week as debar price declined to lower than USD 644/mt for the first time since July 2012 which had reached USD602 /mt. Market participants expect debar to drop to USD604 /mt . There is no demand and mills are facing lack of liquidity like every year end, besides some speculations by traders will pressure this market situation more.
Surely downward trend is expected by market participants till year end ( 20 Mar 14). Warehouses are empty as traders have avoided stockpiling for 4 months. Just a positive sentiment would help market stabilize. Downward trend in prices will end in more stoppages at mills and bankruptcies of traders.
Flat products
HRC market was up by USD6 /mt to USD 739/mt on truck in Anzali including 6% VAT. HRC import level has dropped from 304,000 during Oct- Nov to 214000 tones during last month ( Dec- Jan). But low demand and exchange rate had made prices downward.
Importing has no profitability at the moment and investors avoid steel market.
Price of HRP from Kavian and Oxing steel mills dropped by USD8 /mt during last week as demand is low and market expect prices to drop. It seems that last expectation of USD684/mt for HRC is happening. HRC thickness 2.5-15 mm from Mobarakeh Steel Co declined by USD 4/mt but buyers were looking for just immediate needs.
CRC market is facing limited supply level especially sizes 0.7-1.25 mm. prices have not increased so small mills are not interested to produce. Market participant are waiting for final decision of government about energy subsidies in coming Iranian year ( from 21 Marc 14 ).
HDG market was also faced with limited demand and price declined by USD8 /mt during last week in Iran..
(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