Billet
Billet price was downward during last week in Iran as expected. By last Saturday, domestic billet size 120 mm was Rials16.7 million/mt on truck including 8% VAT. Imported billet size 150 mm was Rials17million/mt on truck in Anzali including 8% VAT and custom duties, which finished the week at Rials16.4million/mt.
By middle of the week some rumors that billet import will not get official exchange, made billet price stable. Billet size 125 mm in import market was stable at Rials17 million/mt including VAT and custom duties.
Stoppage of allocating currency from exchange room to import billet didn’t affect billet price due to :
1- Limited demand of long products
2- Enough supply level of domestic billet producers which satisfy market needs
If infrastructure projects were active and long products were in good demand, this announcement would change market trend. Besides, number of Iranian billet producers is increasing and two new production lines will start in near future with annual production capacity of 1 million tones for each one. Nominal production capacity of billet producers is totally 17 million mt /year but many mills working under their economical capacity level at the moment. Therefore, this decision by related authorities would help to protect domestic market.
At the moment Iranian billet producers are worried about their scrap need, but it seems that this problem would be relieved in near future as a big complex is planning to satisfy domestic scrap needs.
Long products
Long products started the week with some declines then prices were improved again by end of the week. Average debar price size 14-32 mm declined to Rials18.05 million /mt ex-work Ahwaz including VAT by beginning of the week and improved again to Rials18.12 million /mt at the end. Debar size 16-22 also experienced same trend and increased from Rials18.3 million /mt to Rials18.4 million /mt ex-work Esfahan including 8% VAT.
I-beam price declined by Rials 3.4 million/mt by beginning of the week but market leaders made it improved again by middle of the week. As the market was not ready to accept improvements, prices were finally Rials 1 million/mt lower than first prices of the week.
Price of merchant bars was almost stable due to their quiet market sentiment. Their inventory level is low but demand level also at the bottom, though price fluctuation is limited. Mills can’t reduce prices any more.
Flat products
Price of hot rolled coil 2 mm thickness declined by around Rials 1 million/mt to Rials 19.5 million/mt on truck in Anzai including 8% VAT during last week in Iran. This trend was expected as market inventory level increased.
HRC size 2.5-10 mm was almost stable despite shortage of some sizes in the market. The reason is lack of demand. HRP market was in the same situation with prices stable.
CRC price was improved due to limited supply level. HDG market experienced improvements for some sizes, but higher supply level made prices stopped by end of the week. Some cargoes from Indian and China are on the way to Iran but demand level has not improved in domestic market.
Ex-rate:
In Exchange Room: Rials 26,515/USD
In free market: Rials 31,200 /USD
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Iran Steel Service Center