Billet
Billet market was downward during last week in Iran. Billet size 125 mm started the week at USD367-372/mt
ex-work including 9% VAT and finished it at USD 347/mt.
Size 150 mm also dropped by USD15/mt to USD352/mt
by end of the week. There were also some lower offers available in the market.
Significant decline in long products demand during last week was
the main reason behind billet downward trend. Cold weather made long products
demand lower. Besides, billet price had peaked and influenced demand level.
Long products mills are waiting for a clear market trend and has stopped buying
till balance come back. Its Christmas time and lower demand for Iranian billet
export market would be inevitable which would affect Iran domestic market
negatively.
Long Products
Long products were downward during week 51st
in Iran. Debar diameter 14-25 mm declined by USD5/mt and finished the week at
average price of USD441/mt ex-work Esfahan. Sizes 18-25 mm were available at
around USD436/mt. Size 16 mm was USD458/mt ex-work including VAT, which made
average price higher.
Average price of I-beam14, 16, 18 mm
dropped by USD2/mt to reach USD476/mt ex-work including VAT. Sellers were ready
for more discounts.
Downward trend continued during the week.
Traders worried about more declines, were offering their cheap purchased
inventories. Lack of demand made the situation worse. Market participants are
asking about market future trend. Whether this downward trend continues and how
much would be? One answer would be that till it reaches average price of available
inventories at warehouses. If average purchased price of debar available at
warehouses In Tehran would be USD397/mt, debar price would probably drop by
USD25/mt within a month. But more downward trend may depend on future billet
price which is unlikely to support more declines in long products market.
Market players mostly believe billet price
won’t be lower than USD345/mt including VAT. Therefore, balance may come back
to debar market within a month when cheap inventories finish.
Flat Products
HRC 2 mm thickness decreased by USD7/mt during last week and
reached USD555/mt on truck in Anzali including VAT and custom duty. Sellers
were eager to give more discounts. For sizes 2.5-10 mm, Mobarakeh Steel co
prices were down by USD7/mt. Consumption level was low and Kavian and Oxin co
prices were also down by USD7-12/mt.
Flat products downward trend has two main reasons:
1- Authorities announced that custom duty for flat products will
declined from 20% to 10%. Though, average price of import cargoes would be down
by around USD50/mt. This decline in duty would affect HRC 2 m thickness more as
market is dependent on its import. During last 9 months of current Iranian year
900,000 mt HRC 2 mm has been imported. With custom duty halved, its price would
reach USD496-520/mt on truck in Anzali including VAT and custom duty.
2- The other reason behind flat products downward trend is lack
of demand. Supply level is low but current market inventory seems enough.
It’s noteworthy that 2 factors are supporting market against
harsh declines, including lower supply level and fluctuations of ex-rate.
CRC
market was downward in Iran. Average price of CRC thickness 0.70-1.5 mm dropped
from USD674/mt to USD662/mt on truck in Anzali including VAT and custom duties.
As custom duty for CRC has halved, downward trend would continue.
Current CRC inventories at Anzali warehouses
include average purchased price of USD450-460/mt cfr Anzali, ex-rate of
Rials36500-36700/1USD and custom duty of USD99/mt. It means USD520/mt on truck
in Anzali including custom duty and VAT. But for new purchases, importers
should pay for USD520-530/mt cfr Anzali, with ex-rate of Rials39000-40000/1 USD
and custom duty of USD49.5/mt. Then finished cost price would be USD565/mt on
truck in Anzali including custom duty and VAT. Domestic market is downward,
therefore importers would move cautiously.
CRC
market would continue downward trend but slightly as market inventory level is
low.
HDG market was unchanged despite limited supply level for
some sizes as the market is quiet.
Ex-rate:
In open market: Rials 40.350
/1USD
25 Dec 2016
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Iran Steel Service Center
IFNAA News Agency
http://www.ifnaa.ir/en/home