Billet
Price of imported billet size 150 mm declined by Rials300,000/mt during last week in Iran and reached Rials14.5million/mt on truck in Anzali including 8% VAT. Domestic origin size 150 mm was around Rials14.3-14.4 million /mt and size 120 mm was around Rials13.8-14.1 million/mt.
20,000 mt of Esfahan Steel Co billet which were sold previous week at IME, appeared being offered in retail market at around Rials14.1million/mt.
As long products are downward, billet price will continue declining in near future. Currently many billet producers in Iran have changed their raw material and use DRI, therefore have lower production costs.
As a result, billet price will decline more in coming future. CIS origin billet price is around USD400 /mt cfr Northern Iranian Ports, but lower oil price and freight rate has led to expectation of more declines in import prices, especially from Chinese suppliers.
Long products
Long products were downward during last week in Iran. Average price of debar size 14-25 mm dropped from Rials17.27million/mt to Rials16.85/mt ex-work including 8% VAT in Esfahan and declined from Rials17.07million/mt to Rials16.7million/mt ex-work including 8% VAT in Ahwaz Market.
I-beam price decrease around Rials200,000/mt by average in Esfahan market. Downward trend in Tehran market was more as there is no interest in buying, everybody wait for prices to reach bottom due to lack of demand.
All these factors have led to negative investment sentiment in this section. Besides, it is last quarter of the year in Iran and steel mills are trying to increase liquidity, so competition between mills increased. The only way for them is to decline prices more.
Flat products
HRC market was downward in Iran and ex-rate fluctuation didn’t help this market sentiment. HRC 2 mm thickness experienced around Rials300,000/mt decline to around Rials17.4million/mt on truck in Anzali including 8% VAT. This material import level had been around 77,000/month during first 8 months of current Iranian year( started at 21st Mar 2014) but It has increased to 101,000 mt and more than 110,000 mt during last 2 months (22 Nov 14 -20 Jan 15). Though, supply surge made prices downward. Currently importing HRC would be with loss for Iranian importer. HRC 2 mm thickness import price is around USD520/mt cfr Iranian ports. Final cost price for importer won’t be lower than Rials17.5million/mt including 8% VAT, so many importers have stopped buying. But Chinese HRC prices are declining, so CIS suppliers would have to follow it to be competitive. Market participants believe lower import level will make market more balanced.
Price of HRC2.5-6 mm was also down by Rials300,000/mt and is expected to continue this trend due to high supply level. HRP price dropped by Rials100,000/mt and is more stable than other flat products as its import level has declined especially for thickness 15 mm or lower.
CRC market was downward. Significant imbalance between supply and demand has made CRC price downward trend very high currently. Average monthly import level of CRC had been 20,000 tones during first 8 months of current Iranian Year ( started at 21st Mar 2014) , but it has increased to around 40,000 /month during last 2 months (22 Nov 14 -20 Jan 15). Besides, market leader Mobarakeh Steel Co also increased its domestic supply at the same time, so supply surplus was apparent and prevented many traders from importing more. In some cases they had to offer from their stocks with loss.
Lower CRC price and lack of demand in HDG market made this flat product also downward. The only chance for HDG market improvement would be lower domestic supply by mills.
Ex-rate:
In Exchange Room: Rials27,455 /1USD
In free market: Rials34,440/1USD
Iran steel service center