Billet
Billet market
experienced an unchanged week in Iran. Import level has become almost zero but
prices are fixed. Esfahan Steel Co sold around 6,000 tones of its billet at
base price of Rials15.55 million/mt excluding 8% VAT at IME( Iran Mercantile
Exchange). It seems that part of these cargoes have been sold in a barter trade
for raw materials. Esfahan Steel Co’s billet is available in retail market at
prices lower than IME level, but there is no interest in buying.
Domestic billet size
120 mm was offered at Rials 16-16.2million/mt including 8% VAT with no serious buyer
in the market. Imported billet size 150 mm is around Rials 17million/mt and
size 125mm is Rials 16.9 million/mt on truck in Anzali including 8% VAT, but
long products market is quiet and has affected billet market too.
Market participants
expect lower scrap price influence billet market, which also depends on IME
price trend.
Price of billet being
offered by two market leaders Esfahan Steel Co and Khouzestan Steel Co is
around 5-7% higher than billet price offered by small mills in retail market.
If these two market leaders reduce base price of billet to Rials15 million/mt, other
mills should follow and reduce prices.
Besides, export level
of these two leaders has increased and if this trend continues, will help
billet price be stable. Domestic billet prices will be more dependent on scrap
price and long products demand.
Long
products
Long products market
had a calm week. Debar price was stable at around Rials 17.95-18.2million/mt ex-work . Ex-stock price in Tehran
was also stable at Rials18.2-18.5 million/mt but limited deals were finalized. Traders
are not interested to restock as final demand is low.
Analysts believe nominal capacity of Iranian steel producers
is around 40 % at the moment. Iranian steel producers’ association has asked
government currently to support steel market with more bank loans to this sector.
Generally, it seems that Iran steel market is not in a healthy situation. If
this trend continues, more bankruptcies especially in private sector is near. But
many market participants are hopeful about government policies for supporting
property market, but it needs some months to show its effects in steel market.
In I-beam market, downward trend in prices is more apparent
as inventory levels are high and it doesn’t let prices improve.
Flat
Products
Hot rolled coil 2 mm thickness was
almost stable at around Rials 20.1million/mt on truck in Anzali including 8%
VAT. As importing this material is possible by allocated currency from exchange
room, so many importers have been eager to import HRC currently. CIS origin HRC
is USD570-580/mt cfr Northern Iranian ports and Korean one is around
USD600-610/mt CFR Southern Iranian ports. But during last week import
transactions were limited and buyers preferred purchasing at minimum level. Price
of HRC 2.5-8 mm dropped by Rials 100,000/mt due to low demand.
HRP price was unchanged during last
week in Iran, some sizes like 12 mm thickness is in low inventory but prices
were fixed.
CRC market was stable despite
limited supply of domestic leader, Mobarakeh Steel Co. Buyers are in the market
for just immediate needs.
Higher ex-rate helped HDG price improves by Rials 100,000/mt , but market inventory
level is high so prices were back again to last week prices by end of the week.
Ex-rate:
In Exchange Room: Rials 26,649/USD
In free market: Rials 31,900 /USD
Iran Steel Service Center