Billet
Billet size 150 mm was stable during last week in Iran import market and transacted at Rials 17-17.5 million/mt on truck in Anzali including 8% VAT and custom duty.
Domestic billet size 120 mm was also offered at Rials 16.2-16.4 million/mt ex-works including VAT.
Khouzestan Steel Co sold its billet at base price of Rials15.56 million/mt and Esfahan Steel Co sold at Rials 15.55million/mt excluding VAT.
At the moment Iran debar market is quiet and billet transaction level has dropped notably. These prices have no profit for section producers. If a re- roller buy domestic billet at Rials16.2 million/mt including 8% VAT, after adding Rials500,000/mt transportation rate and minimum convert rate of Rials1.2 million/mt, final cost price for producing debar would be Rials 17.9million /mt. AT the moment average sale price of debar size 14-28 mm is maximum Rials18.2 million/mt ex- works. Therefore remain just Rials300,000/mt equal to 1% profit for the mill. In this situation, mills prefer declining production level. As price of scrap and HBI has been stable in Iran, billet price won’t drop significantly.
In this situation producers can decline production level or increase export.
But at current economic situation of the country, exporting billet is not a profitable idea, so producers are forced to reduce production to decrease their costs.
Long products
Long products market experienced one of its quiet weeks currently. Average price of debar diameter 14-25 mm was Rials18.48 million/mt including VAT in Esfahan Market and Rials18.05million/mt including VAT in Ahwaz market. Some cargoes were purchased in Ahwaz market under offer price of the mill. Some market participants expect debar price improve regarding current situation of billet market. But market inventory level is high and demand level is limited so any change in long products price needs:
1- Higher demand to answer price fluctuations, but it is not available yet.
2- Positive sentiment regarding better business condition, which is not seen in the market yet. Investors are not yet interested in steel market and this situation will end in more bankruptcies in steel industry.
During last week just I-beam price had some fluctuations due to speculations. Any hope in better situation is being limited each day so these speculations won’t work anymore.
Flat products
Price of 2 mm thickness HRC increased from Rials19.9million/mt to Rials20.2million/mt on truck in Anzlai including 8% VAT during last week. This fluctuation will continue in coming weeks. Actually for a product which is dependent on import market and ex-rate changes, around Rials300,000/mt equal to 1.5% fluctuation is not notable.
In HRP market supply level was low for some sizes but demand is also limited, so prices were almost stable or experienced Rials100,000/mt decline.
In CRC market, import offers increased last week. CRC thickness 0.36-2 mm from Kazakhstan was offered but at limited tonnage. As market sentiment and ex-rate situation is not clear, importers prefer buying at small parcels. In domestic market, Mobarakeh Steel Co supply level has declined and seems that won’t improve in near future. This low supply level has influenced many final consumers’ production lines seriously.
HDG market was in limited supply and also stable prices. Some parcels from India and China helped market stay stable.
Ex-rate:
In Exchange Room: Rials 26,612/USD
In free market: Rials 31,600 /USD
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Iran Steel Service Center