Billet
Billet market was downward during last week in Iran. Last Saturday
billet size 125 mm was USD 372/mt and size 150 mm was USD 377/mt ex-work
including 9% VAT. Supply level was limited and buyers were willing to deal. But
by Sunday prices started declining till end of the week. Size 150 mm was USD 361
/mt ex-work including VAT.
Two main reasons are behind this downward trend, including:
1- Availability of cargoes in domestic market, which were last
cheap purchases from big mills. When market was in need of billet, these
cargoes became available and made its price decline.
2- The main reason behind billet market downward trend was sudden
quiet sentiment in the market despite market leaders’ hard tries. Long products
market became quiet and made billet market depression severe. Re-rollers became
cautious for buying billet due to longs quiet market. Besides, lack of
liquidity is another negative factor in this market condition.
All these factors made market quiet. By last Wednesday billet
offers available in the market was more than demand, which made downward trend
faster.
In near future market participants do not expect any positive change
in billet market.
Long Products
Long products market was downward. Average price of debar ex-work
Esfahan was USD 431/mt and USD 411 /mt ex-work Ahwaz, which finished the week
USD 5 /mt lower. I-beam started the week at USD 503/mt and finished at USD 502
/mt ex-work including VAT. Buyers were not interested any more.
Angle and channel started the week with USD 8-16/mt rise in prices,
but lack of demand made sellers eager to discount on deals. Debar sellers also
were ready for discount but there was almost no taker in the market.
Presidential election is near ( in less than two weeks), therefore
in near future market won’t see any activity despite consumers’ needs.
Flat Products
Imported HRC 2 mm thickness started the week at USD 582/mt on truck
in Anzali port including 9% VAT and finished the week USD 5 /mt lower. Import
offers dropped by EUR10/mt to EUR440/mt. Global markets are not strong and
demand in Iran is also low.
Besides, HRC price declined at IME ( Iran Mercantile Exchange) by Mobarakeh Steel co on Monday. The mill
declined base price of its HRC Class B by 4% equal to USD 22/mt and sold at USD 508.8/mt ex-work excluding VAT. Base
price of HRC Class C also dropped by 3.5% to USD 508.9 /mt ex-work excluding
VAT. These downward trends at IME didn’t affect spot market the same as
Mobarakeh Steel co sell through IME to especial consumers or its service
centers. In retail market HRC price dropped by USD 8-11/mt. For thickness 2 mm
It was just USD 5 /mt decline as Guilan Steel co stopped offering HRC 2 mm
thickness which helped reducing down trend. Other factors were also included in
this downward trend including Mobarakeh Steel co policy for controlling market.
Hot rolled coil export level has reduced during last Iranian year from 1.530
million to 1.06 million tones which is equal to 30% decline in export level.
But Mobarakeh Steel co is increasing production level. With declining base
price at IME we can say the mill is looking for higher export share. If
domestic prices be higher than export prices, the mill would be accused of
dumping in global markets. The other reason is decrease in global prices. If
Mobarakeh co doesn’t decline its prices, would be faced with import competition
and risk of losing market share. Base price of CRC and HDG didn’t change at IME
as their export level had increased during last year be respectively almost
100% and 10%. Therefore there would be no need for declining base prices.
Finally the other reason behind decrease at IME for HRC was lack of demand.
HRP thickness 15 mm and higher was downward by up to USD 11
/mt . Demand is scarce and has made prices down despite limited supply level.
CRC market was almost stable during last week in Iran.
Domestic market depression and downward global prices would lead to lower
prices in coming weeks.
HDG market was unchanged, demand was low and supply level also
limited.
Ex-rate:
In free market: Rials 37.630 /1USD
07th May 2017
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Iran Steel Service Center
IFNAA News
Agency
http://www.ifnaa.ir/en/home