Billet
Billet market was upward by beginning of last week. Domestic production size 120 mm was USD 615/mt ex-work including 6% VAT and size 150 mm from import market was USD639 /mt on truck in Anzali including 6% VAT. Billet size 150 mm from Khouzestan Steel mill surged in base price from USD572 /mt on Tuesday to USD609 - 610 /mt excluding 6% VAT on Wednesday at TME.
These transactions made billet market sentiment stranger. Billet size 120 mm for domestic production was priced at USD663-667 /mt ex-work including 6% VAT on Wednesday and size 150 mm imported billet was USD679 /mt on truck in Anzali including 6% VAT.
But market sentiment was reversed on Thursday , price of imported and domestic billet dropped by USD16 /mt . Besides, there was no buyer in the market.
Reasons behind last week upward billet price include:
1-Market participants expect prices to rise generally due to anticipated higher cost price of steel after ending energy subsidies in coming year.
2- More stockpiling by traders for New Year in Iran ( from 21 March)
3- News of change of ex-rate in exchange room in next Iranian Year from Rials24,800/1 USD to Rials 25,600/USD.
Last week upward trend in billet market was much higher than expectations, so market players stayed back and prices started dropping by end of the week. Billet price would be more stable in coming days at around USD643 -651 /mt ex-work including 6% VAT for domestic productions.
Long products
Long products prices were affected by news of energy subsidy ending in New Year as traders expected significant rise in cost prices. As a result debar price experienced daily increases from last Sunday till Wednesday which increased by USD8-20 /mt per day. Khorasan Steel Co which sold its debar at base price of USD643/mt at IME on Saturday, sold the same cargo at USD683 /mt on Wednesday which means 6% increase in 3 working days. Debar market which was almost stable during the year suddenly fluctuate heavily in just 3 days. This sudden surge in prices was due to energy subsidies ending in coming year and expectation of rise in prices. But surely energy costs for producing steel shouldn’t affect prices as much as this.
As base price of debar increased to around USD683 /mt at IME, prices were more than USD743 /mt including 6% VAT in retail market. But prices were down again on Thursday and dropped by USD16 /mt . Any rise in price of debar in coming weeks would be due to higher transportation fees as warmer weather will increase import rate, it would rise transportation fees by USD8/mt.
Market participants believe that current debar price is the peak and prices won’t change significantly in coming weeks and also next month. Cheap purchased cargoes will reach market next month and real demand level is very low.
Flat products
Flat products market was upward significantly during last week. 2 mm thickness HRC increased by USD32/mt to USD801 /mt on truck in Anzali including 6% VAT by Wednesday.
HRC price from Mobarakeh Steel Co also increased by USD28 /mt . HRP from Kavian and Oxin mills were in limited supply so prices were up by USD32 /mt for some sizes. Average rise in prices was around USD22/mt. As demand level would decline in coming weeks like every year end, more improvement in HRC price is unlikely.
CRC market experienced limited supply level and prices were up by USD28 - 40 /mt but surely it would be latest price changes as we are in year-end sentiment.
Higher CRC price made HDG market upward despite stable demand level. Ending energy subsidies will influence HDG price by up to 10%.
(Ex-rate: In Exchange Room: Rials 24,891/USD)
Note: Prices have been converted from Rials to USD using exchange room rate as a base.