Billet
Billet market experienced a slight downward trend in Iran. Billet size 150 mm in import market was stable at Rials17 million/mt on truck in Anzali including 8% VAT and custom duties. But size 125 mm in import market dropped by Rials100,000/mt to Rials16.9 million /mt on truck in Anzali including 8% VAT. Billet size 120 mm in domestic market also dropped by Rials150,000/mt to Rials16.25 million /mt ex-work including 8% VAT.
At the moment Iran long products market is weak and producers have decreased capacity mostly. Besides, there isn''t enough liquidity for buying billet.
Billet import market has become more active and ex-rate is dropping on daily basis in open market. These factors will make billet price downward in near future. At the other hand it has been announced that billet won''t be imported with exchange room allocated currency any more, so downward trend of prices in near future won''t be significant.
Price of CIS billet has increased around USD10/mt currently and this upward trend will continue in near future. If base price of billet in import market stay at USD510/mt cfr Northern ports, its cost price for Iranian traders would be more than Rials 17.8 million/mt after custom duty and VAT.
Low demand of long products has made billet market quiet despite higher foreign offers and cancellation of allocating currency from exchange room for importing billet. A reason behind this is increased share of domestic billet production which has declined import market influence on pricing.
Long Products
Long products market was downward during last week in Iran. Market participants were confused about the news that importing steel products with allocated currency from exchange room will be forbidden, till Monday that it was cleared just HRC 2 mm thickness and CRC can use this allocation for import. But market did not respond significantly to this news as:
1-Demand is scarce. So market participants believe that any decision which change steel products cost price won’t affect market sentiment seriously. Market inventory level is enough and there is no demand, so this kind of news is not affecting market trend at the moment.
2- Declining ex-rate . Which has been on a daily basis currently and is expected to continue for a while. Though, buyers prefered holding a cautious attitude toward new purchases.
3- Wait and see policy of market participants which are waiting for the influence of government new plans.
These factors together have made long products market quiet with no serious investor. Therefore, price of angle, channel and debar bottomed and there was no interest in offers at IME.
Flat products
Price of HRC 2 mm thickness was in fluctuation during last week. By beginning of the week after rumor of no allocation of currency in exchange room for importing this product, price started rising from Rials20.4 million/mt to Rials21.5million/mt on truck in Anzali including 8% VAT on Monday. But after that some cargoes received allocation from exchange room so prices dropped to Rials19.5 million/mt. Some traders used this market confusion and had good purchases. But By end of the week HRC 2 mm thickness price increased again to Rials 20.2 million/mt. Finally it was cleared that just this material beside CRC can use exchange room currency allocation for importing in steel market.
HRC thickness 2.5-6 mm from Mobarakeh Steel Co had stable prices. Just thickness 4 mm is in harsh shortage, so its prices was affected. HRP market experienced slight decline of Rials50,000/mt due to market sadness.
CRC market was in the same situation as HRC 2 mm thickness about currency allocation rumers. Its price increased by Rials1 million/mt in first days of the week but then started dropping again to last week prices.
HDG price increased due to supply shortage and this trend is expected to continue in near future. Two leader producers are trying to find their way for higher export level so domestic market allocation declined.
Ex-rate:
In Exchange Room: Rials 26,568/USD
In free market: Rials 31,000 /USD
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Iran Steel Service Center