Billet
Billet price was downward during last
week in Iran. Billet size 150 mm reached lower than Rials13 million/mt ex-works
including 9% VAT. Offers were between Rials12.3 -13.1 million/mt ex-works
including 9% VAT, but big producers were not offering in domestic market. Khouzestan
Steel Co and other big mills were not in domestic market as they are busy with
export orders. Billet offers available in the market were from small private
mills. When Khouzetsan Steel Co is not offering billet in Iran market, price of
many related raw materials like DRI, iron ore or pellet would stay stable as
billet is a base for their pricing.
At the moment billet market has been
divided to two parts. One part belongs to big producers which are busy in
export market or big contracts and the other part including small mills which
are private owned and produce based on daily orders. This will lead to higher sensitivity
of production to price trend. When price drop, production decrease and vice
versa. This situation will decline market confidence.
No domestic supply of Khouzestan Steel co
billet has helped market and downward trend slowed down. Import offers are
downward too with Chinese material at USD340/mt cfr and CIS origin at USD410/mt
cfr Iranian ports. Some market participants were talking about USD320/mt fob
for Chinese billet and USD390/mt cfr for CIS one. Importing billet is not economic
at these prices yet. The question is that if global billet price continue
downward trend, Iranian billet export would be competitive or not. If export
level decline, producers will come back to domestic market. But if they use
same pricing policy of Mobarakeh Steel co during last year, billet market would
stay stable. Last Year Mobarakeh Steel
co fixed prices in domestic market but stayed competitive in export markets at
the same time to help domestic market condition. If so, long products prices
would bottom at a little lower than current prices.
Long Products
Long products were downward during last
week in Iran. Esfahan origin debar diameter 14-25 mm dropped by Rials700,000/mt
to Rials15 million/mt ex-works including 9%VAT by end of the week.
I-beam size 14-18 mm dropped by
Rials400,000/mt to Rials15.3million/mt ex-works including 9%VAT.
Big producers such as Esfahan Steel co
and Khorasan steel co are resisting against downward trend but there are some
factors affecting market negative sentiment:
1- Worries about more decrease in prices
made sellers reduce offers to get rid of inventories
2- Cheap purchased cargoes available in the
market, from last year
3- Lack of real demand, which is the main
reason for downward prices
4- Downward trend in global billet
markets, which made Iran market participants worried.
If billet export level decline, domestic
supply level will increase. Therefore billet price may drop and affect long
products too.
Flat Products
Imported HRC 2 mm thickness CIS origin
dropped by Rials400,000/mt to Rials17.9 million/mt on truck in Anzali including
VAT and custom duties. Chinese product declined by the same to Rials17.7
million/mt on truck in Imam Khomeini port including VAT and custom duties. HRC
thickness 2.5-15 mm were also downward from Rials18.7million/mt to Rials18.4million/mt.
The downward trend was despite lack of supply from Oxin and Kavian Steel co.
lower prices is due to lack of real demand. As demand level is unstable at the
moment, downward trend would continue for a while to reach the bottom.
HRP with thickness more than 15 mm was
faced with serious lack of demand, though prices were downward. Oxin co product
size 20-40 mm was being offered at Rials16million/mt ex-work including VAT, but
buyers were bidding at lower prices. Chinese HRP has dropped to USD410/mt cfr
Iranian port and made importers concerned. But due to increases in custom duties,
if import prices reach USD350/mt cfr, would be interesting for importers. Generally
current sadness in the market has made buyers cautious. They avoid building
inventory level. Seasonal market sadness in Holy month of Ramadan would make
downward trends increase.
CRC market was quiet. Imported CRC was downward,
for some sizes as high as Rials1.5million/mt. Average price of Kazakhstan
origin CRC thickness 0.7-1.5 mm was Rials23 million/mt on truck in Anzali port
with 15-20 days delay in payment. At the moment importers are not eager to deal
as import price is second factor they are concerned about. First factor is
demand for their cargoes which is not available due to market sadness. Downward
trend will continue for a while and importers are waiting for the bottom at
global markets. They are offering at low prices their available inventory to
avoid further losses. At the moment domestic leader Mobarakeh Steel co CRC is
more competitive.
HDG market was also quiet. With prices
decline by Rials500,000/mt. This trend may continue in near future.
Ex-rate:
Official rate: Rials30,379/1USD
In open market: Rials 34,430 /1USD