Iran Steel Market Trend in Week 39th , 2014

Billet market experienced an unchanged week, with size 150 mm transacted around Rials 17 million /mt including 8% VAT and custom duty on truck in Anzali port. Billet size 120 mm also was offered at around Rials16.1-16.3 million/mt on truck in Anzali including 8% VAT, with limited deals finished. Domestic production billet size 150 mm from Esfahan Steel Co was sold at Rials 16.8 million/mt including VAT.

Billet import level to Iran has declined significantly and investors prefer working in other items. Imported billet price is USD490/mt cfr Anzali port, and cost price for importers which should use free market ex-rate would be around Rials 17.1million/mt which is obviously not competitive in current market situation.

During last week deals at IME( Iran Mercantile Exchange ) for billet size 150 mm was done at base price of Rials15.41 million/mt and Rials15.56 million/mt respectively from domestic leaders Esfahan Steel Co and Khouzetsan steel Co.

Current low demand of billet shows that its price would be downward. Domestic producers are paying more attention to export market. Their prices are competitive but cheap Chinese billet at USD505/mt cfr Persian Gulf Ports is pressuring their chances in this region.

Long products

I-beam market was quiet during last week in Iran due to lack of demand and is not expected to improve in near future as market participants are keeping wait and see policy.

Debar price was almost stable with limited improvements around Rials500,000/mt for some sizes as mills have decreased production level currently.

As sales price is almost the same as cost price of mills, some of them stopped production during last week. At the moment main factor behind market situation is low sales level and lowering prices would not help producers. Though, decreasing production level is the only choice for them. This situation was expected and will continue till supply and demand level be balanced.

Pessimistic sentiment in long products market has made investors stay out of this market.  Price of angle and channel is also at the bottom and almost unchanged. Production level is also bottomed and not possible to drop more.

Flat Products

Increasing ex-rate made flat products traders works cautiously, but HRC 2 mm thickness was in upward trend by around Rials 400,000/mt to Rials 20.7million/mt on truck in Anzali port including 8% VAT and custom duty. CIS origin HRC is around USD580/mt cfr Northern ports, so cost price for importers would be Rials 19million/mt . But main problem for importing is releasing cargo from custom office and problems for changing and transmitting currency. Besides, Chinese and Korean offers are around the same price as CIS, so Iranian traders would be more interested to purchase from Far East.

HRC 2.5-10 mm thickness was downward in price. For sizes under 6 mm, limited demand and also supply level is obvious, so prices were unchanged. HRP supply level by domestic producers has increased which will affect prices in near future. Sizes 20-40 mm experienced around Rials 100,000/mt decrease in prices.

CRC price was downward during last week despite upward trend in ex-rate at Exchange Room. Import level at CRC market has doubled during current Iranian month compared to a month ago, so any improvement in price is unlikely. HDG market also experienced a quiet week with prices unchanged.

Ex-rate:   

In Exchange Room: Rials 26,667/USD