Billet
Despite Holidays and lack of demand, billet price was
upward significantly during last week in Iran. Supply level was limited and
sellers were moving cautiously. Domestic billet size 125 mm improved from USD 372-378
/mt to USD 383-386/mt ex-work including 9% VAT. Size 150 mm also surged from
USD 383-388/mt to USD 401 /mt.
At the end of the week supply level was still limited
and sellers were not eager to deal.
On Wednesday, Khouzestan Steel co offered its billet
at IME ( Iran Mercantile Exchange) at base price of USD 380 /mt ex-work
excluding VAT. There was no buyer for it. Latest offer of the mill at IME was
around a month ago at base price of USD 359/mt. Therefore the difference between
these two base price offers would be USD 21 /mt which is 6%. The reason behind this
surge in price is DRI price increase around USD 10.5 /mt during last month.
Absence of Khouzestan Steel co as a market leader in
IME has made market participants confused. Some says this is an alarm to make
market ready for new prices. Some others say domestic market needed this
increase to reduce the gap with Khouzestan Steel co export offers. Meanwhile some
others believe DRI price rise has made billet price up. Any way market insiders
believe this upward trend was necessary after around a year depression. But any
reason behind the upward trend, it doesn’t mean market is active and strong. It
was just a move in price.
DRI producers may go to summer maintenance for a month,
which will make billet supply level limited during the summer. Some insiders
believe Iran billet export level will decline due to summer holidays around the
world and lower demand, therefore mills will increase domestic supply. If this
happen it may make prices lower. But generally Iranian mills are finding their
share in global markets and export level is rising.
Long Products
Long products market started the week quiet. End of Ramadan
Holidays in middle of the week made market almost unchanged. On Saturday average
price of debar diameter 14-25 mm was USD 433 /mt ex-work Ahwaz and USD 444 /mt
ex-work Esfahan including VAT. I-beam size 14, 16 and 18 mm was also USD518 /mt
ex-work Esfahan including VAT.
By Sunday some talks about possible rise in prices was
heard. Finally By Wednesday after billet price increased in IME, long products
also surged suddenly. Debar diameter 14-25 mm finished the week at USD 446 /mt ex-work
Esfahan including VAT and Ahwas product was not being offered. I-beam average
price was also around USD 5 /mt higher than Saturday. I-beam size 16 mm was not
being offered much.
By Wednesday angle and channel producers stopped
offering after USD 5 /mt increase in prices.
Esfahan Steel co has increased its debar price at IME
recently, therefore upward trend in retail market would be possible in near
future. Besides, upward trend of billet at IME has made this expectation more
possible.
Flat Products
HRC 2 mm thickness experienced upward trend during week
26th in Iran. It started the week at USD 592/mt on truck in Anzali
port including 9% VAT and custom duties on Saturday and finished the week at
USD 597/mt. At Imam Khomeini Port (BIK) it was stable due to Holiday sentiment at
USD581/mt on truck including 9% VAT and custom duties.
Imported HRC is expected to be upward slowly in Iran
as MMK is not offering and Kazakhstan origin HRC is not available at high quantity.
Domestic product thickness 2.5-15 mm was also upward by Mobarakeh Steel Co and
finished the week USD 8 mt higher. Kavian co HRP also improved by USD 5 /mt,
but Oxin co prices stayed unchanged.
At the moment market participants expect prices to be
upward as rise in billet price will affect slab price too.
CRC market was quiet and unchanged. Ramadan Holiday
affected last week market sentiment but generally mills’ summer maintenance and
stoppage is coming, though, any significant change in market trend seems
unlikely. Besides, CRC demand is weak and available market inventory is enough.
HDG market was
calm with some sizes rose by USD 3 /mt.
Ex-rate:
In free market: Rials 37860 /1USD
02nd July 2017
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Iran Steel Service Center
IFNAA News &
Analysis
http://www.ifnaa.ir/en/hom