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Billet
Billet price was upward in a fast pace during last
week in Iran. Market participants were confused. Upward price of DRI and increasing
demand of Fareast customers as main export destination of Iran’s billet were
main reasons behind this trend.
Analysts explain this upward trend due to:
1- Limited DRI supply level which led to production
cuts at many mills.
2- Higher scrap price and its supply shortage
3- Limited billet inventory of Re-rollers
4- Higher billet and iron ore price in China, which
made Iran steel products demand increase in other destinations. Iranian
billet exporters increased their offer price up to USD410/mt fob Iranian
ports.
5- Confusion of customers at IME with no clear trend,
which made market sentiment upward.
During last week DRI supply shortage increased as
some traders increased prices up to USD 211 /mt. It is summer maintenance time
at some production lines, besides, hot weather and power cuts at some other
mills led to more production cuts of DRI. Besides probable annual maintenance
of Chadormalou Mining co and possible pellet shortage also affected market
upward sentiment.
Besides, upward trend of DRI has forced billet
producers interested in scrap purchase which made scrap price also upward in
the traditional season of lower scrap supply. Higher Chinese billet in Far-east
import market, has led to higher demand for Iranian billet and slab.
Therefore, Iranian leader mills focused more on export. This pressured
domestic market.
Khouzestan Steel co increased its billet base price
at IME by USD 22 /mt compared to a week ago. But the offer didn’t lead to any
deal at IME. Actually billet base
price at IME has increased by USD 44 /mt within a month. Therefore, base
price of DRI won’t be lower than USD 195 /mt. The billet offer at IME didn’t
finalized and just made market confused.
Some news was heard about establishment of two
pellet production lines in coming 2 months with 10 million tones annual
capacity. If so, DRI production capacity would rise to more than 20 million
tones. Besides, summer holidays in July and August would make billet trade
quiet in global markets when Iranian mills are in maintenance stoppages too.
Therefore, we can say current market trend won’t last long and is not an indicator
of future trend.
Market
insiders believe base price of USD359 -370 /mt ex-work excluding VAT would be
logical for billet at IME. With higher DRI production, billet price would
come back to this level. Current surges of billet price has made re-rollers
stay back and decline purchases to immediate needs level. This would help
market prices move back.
Long Products
Long products market passed a week full of confusion
and pressure. Domestic demand level is very limited, but higher production
cost especially due to billet price rise, made long products price upward.
Average price of debar diameter 14-25 mm increased by USD 26 /mt to USD 475
/mt ex-work Ahwaz including 9% VAT and the producer not eager to sell. Average
price of debar in Esfahan market also improved from USD 453 /mt to USD 478 /mt
ex-work Esfahan including VAT.
Average price of I-beam size 14- 18 mm was also up
by USD 26 /mt to more than USD 549/mt ex-work including VAT. Fast rise of
prices made traders worried and increased purchase level during the week. A
mill with high inventory level was succeeded to sell significant tonnage of
its products. By middle of the week some traders stopped purchasing as upward
trend was illogical. When Khouzestan steel co billet offer at IME on Wednesday
didn’t finished in transaction, long products market also stopped. By
Thursday sellers which were not eager to discount and just accept cash
payment a day ago, became ready for USD 5 /mt discount with delay payment.
Market participants expect price trend reversed in coming days as
warehouses are full of cheap purchased cargoes which won’t let prices
continue rising. But downward rate depend on billet price. Long products decline
won’t be higher than USD 13 /mt as billet supply level is still limited. If
Khouzestan steel co decreases its base price at IME, long products downward
trend would increase.
Flat Products
HRC 2 mm thickness started week 27th at
USD 620 /mt on truck in Anzali port and USD 602 /mt on truck in BIK port
including 9% VAT and custom duties.
It finished the week rising as on Wednesday it was
USD 636 /mt and USD 620 /mt respectively.
Market insiders believe lower import level during
previous months has made prices upward. MMK co one of main suppliers in Iran
flat products market has been inactive in Iran and made import level decline.
Besides, demand level was also low.
Other reason behind higher price was increasing global
price of HRC as import offers has improved by USD 25 /mt to USD445/mt cfr
Anzali port with Kazakhstan suppliers not eager to offer due to low inventory
level. Market participants expect upward trend continue.
HRC 2.5-3 mm thickness was in
limited supply and its price was upward. Thickness 2.5-6 mm improved by up to
USD 16 /mt. Higher base price of HRC at IME up to USD 21/mt made thickness
6-15 mm also up. HRP thickness higher than 15 mm started the week rising by
USD 5 /mt by Sunday and sellers tried to raise the increase rate to USD 13
/mt, but were not succeeded and prices became downward. Demand level is low
and market inventory level is high, though, HRP price won’t be faced with
significant changes in coming weeks as slab price has been also unchanged
currently.
CRC market experienced an upward
week due to lower supply level of domestic leader and USD20/mt rise in global
prices. Average price of CRC increased by USD 13 /t by last week and sellers
were not eager to offer.
HDG was upward during the
week by around USD3-13/mt rise depending on thickness.
Ex-rate:
In free market: Rials 37,890 /1USD
09th July 2017
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Iran Steel Service Center
IFNAA News &
Analysis
http://www.ifnaa.ir/en/hom
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