Billet
Billet market was upward during week 44th in
Iran. Khouzestan Steel Co offered its billet at IME( Iran Mercantile Exchange)
at base price of USD350/mt ex-work excluding VAT, USD5.5/mt higher than
previous weeks. After this transaction at IME, other mills increased their
billet prices.
In retail market, billet price size
150 mm of khouzestan Steel co or Arfaa co increased from USD354/mt to USD367/mt
ex-work including 9% VAT. Some deals were done at USD364/mt ex-work including
9% VAT. The reason behind this upward trend was just positive sentiment of the
market as demand is still limited.
Billet size 125 mm was also up in
offers by USD8/mt to USD364/mt ex-work including 9% VAT.
Long Products
With upward trend seen in billet
market, long products were also upward during last week in Iran.
Upward trend made market activity
improve but transactions level was not up much.
Debar diameter 14-25 mm started the
week at USD441/mt ex-work Esfahan including 9% VAT but finished the week at USD452/mt.
I-beam size 14-18 mm was also up by USD12mt to USD492/mt ex-work Esfahan
including 9% VAT. Other long products like angle and channel were also upward.
They started rising by last Sunday and improved more when billet base price at
IME increased by Tuesday.
Long products upward trend was due
to rise in billet market or market leader Esfahan Steel co pricing policy , not
demand level. The upward trend would just lead to higher scrap price, which
would be a negative factor for small mills margins.
Some market participants think that
long products upward trend is related to global markets rising prices. But the
point is that Iran long products production chain is not related to global
markets at all. Production costs have
not increased too and demand is still low. Though, the question is that why
prices have increased.
Flat
Products
HRC 2 mm thickness experienced some
fluctuations during week 44th in Iran. Imported HRC 2 mm started the
week at USD557/mt on truck in Anzali including 9% VAT and custom duties, by
Wednesday it increased by USD17/mt, and then finished the week at USD568/mt.
The reason behind upward trend was limited supply from CIS origin. Import price
is USD470/mt cfr Anzali port. Some previous cheap price purchases are being
offered at USD450/mt CFR ready to be shipped. After around 3 months, Chinese
cargo was also offered at USD557/mt on truck in BIK port including VAT and
custom duty.
Market participants mostly believe
due to higher prices in global markets and import interruptions during last 2
months, HRC price won’t decline. Besides, Mobarakeh Steel co increased its HRC
class B base price at IME from USD452/mt to USD478/mt. HRC class C also
improved from USD440/mt to USD456/mt. This rises made importers hopeful.
HRC 2.5-15 mm thickness still was in low
supply and upward trend in prices continiued. Mobarakeh Steel co increased its
price by USD22/mt and was succeeded in sales. Upward trend was logical as
global prices have improved by at least USD50/mt during last 2 months.
Mobarakeh Steel co has the chance to export more at the moment. Besides, import
price of USD470/mt cfr with custom duty is not competitive at the moment.
Therefore domestic users accepted increase in prices.
HRP thickness more than 15 mm was in strict
supply shortage. Kavian co product is very scarce and Oxin co prices improved
by USD28/mt compared to two weeks ago and reached USD524/mt ex-work including
9% VAT.
HRP import is not economic as cfr price of
USD470/mt would cost more than USD552/mt after custom duty and VAT.
This situation won’t continue this way long.
Domestic production should rise or custom duties may decrease to make import
prices competitive. But current supply level can’t justify limited demand level
at the moment. If demand improves, what would happen to market trend?
CRC market was upward by beginning
of last week. By last Monday, Mobarakeh Steel co made its base price at IME USD524/mt
excluding VAT, with this rise at IME, retail market sellers stopped offering.
This situation made import price also rise by USD55/mt after custom duty and
VAT. Market trend was not clear as offers were heard with USD28/mt difference.
By Wednesday market became more stable but still USD28-55/mt higher than
beginning of the week. CRC import level has been low during last 2 months and
import prices are not much different from current sale prices. This has made
importers more cautious.
HDG market was faced with limited
supply level. CRC supply level has decreased as a raw material for HDG
production. Therefore, HDG was up by USD8-28/mt. Market participants expect
more upward prices coming as Zinc price has also improved in global markets and
number of domestic producers has declined too.
Ex-rate:
In open market: Rials 36.250 /1USD
05 Nov 2016
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Iran Steel Service Center
IFNAA News Agency
http://www.ifnaa.ir/en/home