Billet
Billet price was downward during
last week in Iran. Size 150 mm dropped by Rials150,000 / mt to Rials16.9
million / mt on truck in Anzali including 8% VAT and custom duty. Domestic
billet size 120 mm also experienced the same decline in price to around
Rials16.25 million / mt on truck including VAT but there was no interest in
buying. Domestic production billet size 150 mm also priced at Rials16.5-16.7
million / mt including VAT, but no buyer in the market.
Import offers from CIS are USD520/mt
cfr Northern Iranian ports but are not interesting for the buyers as
fluctuations in ex-rate and some problems in transferring money would increase
cost price for importers. Besides, domestic supply level is enough at the
moment and there is no need to import. Actually, if import supply level stop
completely for any reason, domestic mills can support market with higher
production.
There are two reasons that importing
billet has not stopped yet, including:
1- Import payment term which is 30%
prepayment and the rest on shipment time. But for buying form domestic market,
it should be paid 100% in cash and accepting possible risks about delay in
delivery or quality of the cargo.
2- Price of imported billet at
USD520/mt cfr Northern ports is yet profitable for traders, but buying from
domestic market has no profit for them. Therefore, billet import level during
current Iranian year ( 21 March-01 September) has been around 98.452 mt.
For increasing investment level In
domestic billet production despite import market , we need changes in payment
terms and purchasing procedures from mills or IME( Iran Mercantile Exchange). This
needs changing policies at IME to avoid import parcels have a competitive
strength.
Long
products
Long products demand level is
limited like previous weeks and some traders were trying to destock by offering
cheaper than mills during last week in Iran. But demand level is scarce and
there is no hope for improvement in near future.
Average price of debar declined by
Rials 150,000/ mt to lower than Rials 18 million / mt ex-work including VAT.
Some market participants expect around Rials 1 million / mt more decline in
debar price before any improvement. Those who don’t accept this idea say that
this amount of decrease in debar price need same declines in the raw materials
such as scrap and DRI price which is not possible. If the situation continues,
many small steel mills will be pushed to closures and this would affect billet
producers too. When steel mills experience bankruptcy and closures, it would influence
their bank loan payments too.
Esfahan Steel Co sold I-beam size 18
mm at Rials 16.41 million/ mt ex-works excluding 8% VAT at IME during last
week. From beginning of current Iranian year ( 21 Mar-03 Sep)around 456,000 mt
of debar and 430,000 mt of I-beam has been transacted at IME, which is equal to
178,000 mt per month and annual amount would be 2.3 million mt.
I-beam and merchant bars also
experienced around 1 or 2 % declines in prices due to low demand level. Prices
are at the bottom and downward trend in prices would not be significant.
Flat
products
Price of HRC 2 mm thickness increase
by Rials 600,000 / mt during last week in Iran to Rials 20.2 million / mt on
truck in Anzali including 8% VAT and custom duty. The upward trend was due to
higher ex-rate, problems in transferring money and delays in custom clearance
for imported cargoes. Market participants
don’t expect any decrease in prices in near future.
Price of HRC 2.5-15 mm thickness dropped
except for sizes 4 mm and 12 mm which are in supply shortage. But lack of demand didn’t let their prices
improve. If supply level of these sizes increase, prices will drop
significantly.
HRP with thickness 15 mm or higher
experienced apparent decline in demand, though prices dropped by
Rials200,000/mt. Market players expect this downward trend continue in coming
days.
CRC market was almost quiet at beginning
of last week. Domestic leader mill Mobarakeh Steel Co is offering almost
nothing in domestic market. Some participants think Mobarakeh Steel Co has
reduced production level and some say it is exporting its production. This has
led to significant decline in CRC supply level in domestic market. As ex-rate
changed, prices increased by Rials100,000-200,000/mt by middle of the week, but
just buyers which had immediate need accept these increases.
HDG market was in low supply for
some sizes such as 0.40 mm, but higher import cargoes made market stable.
Ex-rate:
In Exchange Room: Rials 26,616/USD
In free market: Rials 31,780
/USD
Iran Steel Service Center
07 Sep 14