Billet
Same as previous weeks, Billet Trend was downward. Size 150MM in Anzali cost at Rials 17,100,000M/TNS. Domestic mills size 150MM also offered at same price, size 125MM, offered at Rials16,200,000M/TNS up to Rials 16,400,000M/TNS but volume of deals was too low. Most of buyers, order very cautiously. Negotiation of 5+1 improved Rial against USDollar rate, it supported wait and watch policy, so traders started to offer their stocks. Due weak demand, endusers reduced their inquiries. Most of participant expect that foolad Khozestan reduce his billet price in IME, as all producers of long products are losing at today’s retail price, by continuing this situation, they might stop producing long products. The other factor which empower this expectation is fasting month that will start next week and also seasonal market depreciation.
In Middle East region, billet price is coming down. Competition of CIS and Chinese billet will force Foolad Khozestan and Isfahan Steel plant to reduce their export price, or they have to reduce their price in domestic market, the last choice for them is to limit supply in IME, and it seems that they chose last one, but how long are they willing to continue this policy?
Long products
One of the worst week was experienced for long products. On Monday, market shocked, prices reduced Rials 100,000M/TNS up to Rials 200,000M/TNS daily. In spite of mills reduced their sales in IME seriously, but there is really low demand. There is mainly two reasons for price reduction, first; demand dried, second; wait and watch policy.
Demand cannot change easily and fast, but wait and watch policy is not only and economical condition, even one good news from meeting of 5+1 with Iran can change this mentality.
Steel traders now escape of their stocks. They prefer to hold cash in their bank, deposit to invest it on steel. Even sharp drop in Tehran Exchange market did not help steel market, this situation will put pressure on price and quantity in next weeks.
Flat products
HRC 2.00MM price dropped from Rials 19,300,000M/TNS to Rials 19,100,000M/TNS in north Iranian part, affected imported Parcells from China and India, pushing down price of this item. Indian one offered at Rials 18,800,000M/TNS in BIK, as far as coil weight is about 20M/TNS, most of pipe mills prefer to purchase it. Since foreign currency of this item was allocating faster than other steel products, we had good import level during past 3 months but demand is decreasing, so price reduction is logical.
Other HRP thickness up to 12MM witnessed up to Rials 300,000M/TNS price reduction, imported HR Plate of 6MM up to 12MM in Anzali was main reason for that. Short delivery volume of Mobarake kept market price decrease but same items stock levels are scared specially 2.5 - 4MM.
HRP 10MM and up had good supply, Kavian lead the market with package of 1250 and 1500MM width, since Oxin has problem with delivery.
CRC faces shortage of stocks due rare supply from Mobarake, as far as import of this item is not profitable, stocks are too small but low demand is helping price to be stable. In Ramazan demand will come down more.
Galvanized coil has real low demand in spite of low availability, so price had no serious movement. In fact, wait and watch policy is ruling market, so price must change to improve conditions.
Ex-rate:
In Exchange Room: Rials 25,609/ /USD
In free market: Rials 32,050 /USD
Iran Steel Service Center