Billet
Iran steel market started its activities after New
Year Holidays but billet market didn’t have a clear beginning as market leaders
such as Arfaa Steel Co and Khouzestan Steel Co were out of market. Billet price
in global markets has increased and long products were also upward, therefore
Iranian billet producers were hesitating to offer new prices.
By last Wednesday, finally 2 mills offered billet
in domestic market. Billet size 150 mm was offered at Rials12.2 million/mt and
size 125 mm at Rials12.1 million/mt ex-works including 9% VAT. Imported billet
was also upward and has reached USD380/mt cfr Northern Iranian ports. After
custom duties and other costs, imported billet cost price would be Rials15
million/mt including VAT and custom duties.
Besides, Iranian billet producers, especially
Khouzestan Steel Co have a good opportunity for exporting their products.
Khouzestan Steel co export offer is USD310-320/mt fob Imam Khomeini port, which
means the mill can get Rials13million/mt for exporting its billet as they have
export promotions too. At this situation big mills can increase export level,
but yet they cannot get LC from foreign buyers and have to sell on cash. Therefore
they don’t have too many customers at the moment.
When export
level improves, small mills would have better chance to increasing their share
in domestic market.
Long Products
Long products started increasing the day after
New Year Holidays ( 23rd March), when market was not active yet and
big players were absent. Debar diameter10-32 mm which was Rials12 million/mt
ex-works including 9% VAT before New Iranian Year, reached Rials14million/mt
till last Wednesday. Some mills’ speculations had led to this surge in prices.
Market bubble was about to burst by Tuesday and prices became stable by end of
the week. Other long products experienced the same situation, but for I-beam
Esfahan Steel co policies let prices continue rising. Market players believe
this fast upward trend won’t continue.
After market bubble burst, some sellers reduced
prices by Rials200,000/mt . If demand level improves, prices would be stable.
In the other hand when demand is low prices would drop, but the decrease won’t
be significant as raw material prices have improved.
In coming days market would experience some
corrections and a downward trend in long products would be possible.
Flat Products
First working week of New Iranian Year
experienced immediate surge in HRC price. Imported HRC 2 mm thickness which was
Rials15.8 million/mt on truck in Anzali including 9% VAT last time before
holidays, reached Rials16.8-17 million/mt on truck by beginning of last week,
but started declining and finished the week at Rials16.5million/mt. This upward trend was logical as import
prices have increased from USD290/mt to USD420/mt cfr Northern Iranian port.
But offer level from abroad has declined during last 2 months due to limited
supply level. Current offers in Iran market are purchased cargo during late
January at USD320-360/mt cfr Anzali port. At the moment custom duty for the product
has increased by Rials800,000/mt and
finished price for imported material won’t be lower than Rials18 million/mt.
Therefore upward trend for HRC 2 mm is logical as purchase price has increased
and import level is low.
Other sizes of hot rolled coil in domestic market
were also upward. For thickness 2.5-4 mm price reached Rials16.8 million/mt,
then declined and finished the week at Rials300,000/mt lower. For thickness 8-15 mm, also prices were
upward till Tuesday and reached Rials16.1-16.3 million/mt ex-works including
9%VAT. For these sizes, prices depends on Mobarakeh Steel Co supply level at
the moment as imported cargo is not available.
Oxin and Kavian co products thickness less than
15 mm, were in limited supply level and upward prices. Oxin co started the week
with Rials16.1 million/mt ex-works including VAT but finished it at
Rials15.7million/mt for sizes 10-15 mm.
HRP thickness more than 15 mm had the same trend.
By beginning of the week offers were around Rials14.7-15.1 million/mt ex-work
including 9% VAT but finished the week at Rials14.7 million.
CRC market had an exciting beginning as imported
cargoes were more than Rials20
million/mt on truck in Anzali including VAT. Buyers avoid any deal as Mobarakeh
Steel Co CRC was available at the same price or lower. By end of the week
sellers were eager to give discount. Last imported CRC offer has been USD460/mt
cfr Anzali port. It would cost Rials19.5million/mt for importer. Besides,
during last 2 months import level has been limited, therefore upward trend in
prices is inevitable, but won’t last much as demand is low. Mobarakeh steel Co
pricing policies also is an important factor as a competitor to imported
parcels. Mobarakeh Steel Co CRC base price at IME is Rials17.5million/mt,
therefore minimum cost price is Rials19.5million/mt. This is the
same as imported cargoes but with a huge difference in quality as imported CRC
cannot compete with Mobarakeh Steel CO in quality. Consequently its prices
should increase.
HDG market was also upward, but low demand made
prices downward by end of the week.
As we see HRC and CRC prices are following global
markets upward trends. In the future after these corrections, supply – demand
level would affect price fluctuations.
Ex-rate:
In Exchange Room :30,278 Rials /1USD
In free market :34,710 Rials /1USD