Billet
Billet price was a little downward during last week in Iran. Size 150 mm from import market declined by USD 2/mt to USD601 /mt on truck in Anzali including 6% VAT. Buyers were bidding at USD598 /mt and sellers resisted against such a drop.
Currently shortage of electricity at mills and lower production besides long products market depression has affected billet demand harshly. Importers resist against declining prices as they can''t afford any discount. 120 mm billet from domestic producers at USD566 -579 /mt including 6% VAT has been a good alternative for importing.
Khouzestan Steel complex''s billet was sold at IME ( Iran Mercantile Exchange ) at USD555 /mt ex-work excluding 6% VAT with delayed payment . Despite some market participants tried to decline billet price of this producer it was stable.
Some stoppage at production lines due to cold weather currently made billet supply level decrease. Besides, it''s around 3 weeks that billet price has been stable so some hopes about better market sentiment in coming future has existed so billet producers expect better sells in coming weeks till end of the year.
Long products
Long products prices were stable during last week in Iran. Production cuts during previous 2 weeks due to power and gas cuts made demand level higher during last week but prices didn''t change.
Debar diameter 8-32 mm increased by just USD0.4/mt to USD653 /mt ex-work including 6% VAT in Ahwaz market. Debar size 16-25 mm also declined by USD2 /mt to USD675 /mt ex-work including VAT.
I-beam average price for size 14-18 mm was around USD697 /mt ,USD2 /mt lower than a week ago.
In coming weeks Iran long products market will be in following condition:
1-Mills will try to fix prices at current level. They can''t afford to decrease prices as current base price of Khouzestan Steel Mill billet is high for them. So production cuts would be the best policy for getting more liquidity at year end.
2-There are some hopes that investors will come to steel market from stock market as they are faced with negative sentiment. Some investments which have gone to stock market from steel market will be back and improve the situation.
But demand level is very low and an improvement in market sentiment won''t be before New Iranian Year ( start at 21 March 2014).
Flat products
HRC 2 mm thickness was stable at around USD740 /mt on truck in Anzali including 6% VAT during last week. Many offers were available in the market. Lower production level of domestic mills due to current power cuts besides import level has made supply- demand level almost balanced. For HRC 3 mm thickness or higher from Mobarakeh Steel Mill price was upward around USD 4/mt due to supply shortage and is expected to continue. It should be noted Iran Steel market will be active this calendar Year ( finish at 20 March) till next 2 weeks as consumers will be out of market like every year end. Though, any price improvement won''t continue much.
HRP from Oxin and Kavian mills are facing supply shortage, so prices were up by USD8/mt . Buyers resisted against such a rise. If supply shortage continues, producers may be successful for rising prices by USD12/mt. It is an old strategy at every year end which producers decrease supply level to increase sales and get more liquidity. But demand level is not stable.
Some market participants expect better demand in coming Iranian year ( 21 March onward) if this happen price will improve fast. But it should be noted that government policy is to control inflation and fix prices.
(Ex-rate: In Exchange Room: Rials 24,878/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.
Iran Steel Service Center