Billet
Billet market was almost stable
during last week in Iran. Billet size 150 mm from import market was transacted at
Rials 16.9 million/ mt on truck in Anzali including 8% VAT. Domestic origin
billet size 120mm was around Rials16.2-16.3 million/mt ex-works including 8%
VAT.
Esfahan Steel Co sold around 10,000
mt of its billet at base price of Rials15.55million/mt excluding 8% VAT. After
that sold 30,000 mt billet with Rials150,000/mt discount. It's expected that
Khouzestan Steel co will offer billet at base price of Rials 15.3 million/mt
excluding 8% VAT in comming days.
Scrap inventory level is low at the
moment in Iran market, so small billet producers using scrap as raw material
cannot decline their prices, but as iron ore price is downward, mills such as
Esfahan Steel Co and Khouzestan Steel Co which use DRI for producing billet,
can reduce their prices.
Importing billet is not economical
at the moment as ex-rate matter. Besides billet price in global markets is
downward and is expected to drop more as iron ore price is declining and
chinese copetitive billets will drop it to around USD450/mt fob black sea for
CIS billet.
generally billet demand is low in
Iran market and lower prices will lead to closure of many small producers as
many mills are working at minimum capacity at the moment.
Long products
During last week long products
prices were down by up to Rials200,000/mt in Iran domestic market as demand is
low but billet price is almost stable. As production cost is high, re_rollers
are not eager to supply much. There is no buyer and prices are downward.
Market is in a waiting situation, so
despite prices at the bottom, nobody expect significant changes in near future.
By taking billet base price of
Rials1.5 million/mt in to account, it would costs around Rials16.6million/mt
ex-works for reroller afrter 8% VAT and Rials400,000/mt transportation rate
Therefore, debar producer would
costs around Rials17.6 for producing a tone of debar. But at the moment
debar price is around Rials17.9-18.1
million/m ex-work in domestic market so it is totally unprofitable for the mill
to produce debar.
Flat products
HRC 2 mm thickness was unchanged
during last week in Iran at around base price of Rials2.06million/mt on truck
in Anzali including 8% VAT.Korean product supply level at Southern ports was
lower by last week. For sizes 2.5-8 mm supply level is low and import is much
limited but prices are unchanged. For sizes
8-15 mm, higher import level
from Russia has declined prices by
Rials100,000-200,000/mt except for size 12 mm whih is in low supply .HRP price
also declined by Rials100,000-150,000/mt due to lack of demand.
CRC inventory level of domestic
leader, Mobarakeh Steel Mill is yet scarce, some sizes have experienced very
high rises as size 2.5 mm was transacted at Rials3.2 million/ mt including 8%
VAT.
Low domesric supply has lead to
higher import from South Korea and China. If domestic supply increase, market
inventory level would rise and affect prices negatively.
HDG and PPGI market were almost
stable. Demand is low and supply level limited, so market is quiet.
Ex-rate:
In exchange room: Rials 26,679/USD
In free market: Rials32,500 /USD
Iran Steel Service Center