Billet
Billet
market experienced downward trend during last week in Iran. By last Saturday,
billet size 150 mm was USD 574.5 /mt ex-work including 9% VAT and size 125 mm
was USD 567 /mt ex-work including VAT. Market was quiet and in waiting mood.
Long products market was silent and in demand shortage, therefore some market participants
were expecting significant downward trend in billet price but higher DRI price
didn’t let it happen. By last Monday, Khouzestan Steel co sold 10,000 tones of
its billet at IME ( Iran Mercantile Exchange) when demand level was 26,000
tones. The deal was done at average base price of USD 540 /mt ex-work excluding
VAT for delivery of 22nd September. Though, around 16,000 tones of
demand was not satisfied. This move, made billet price rise a little as size
150 mm reached USD 585 /mt and size 125 mm around USD 577 /mt ex-work including
VAT. By Tuesday, onward price retreated again. Market was not confident and traders
were worried about warehouse inventories.
By
Wednesday, Khouzestan Steel Co changed policy and sold 5,000 tones of its
billet at IME when demand was the same at base price of USD 517 /mt. By this
contract with around 4% decline in base price within 2 days, market
participants forecast downward trend has begun.
After
Khouzestan Steel co, other producers started offering billet. They have
declined sales level during previous 2 months. By Thursday, billet size 150 mm
reached USD 569 /mt and size 125 mm was USD 561.5 /mt ex-work including VAT.
Small mills were offering size 125 mm at USD 548 /mt.
During
last 2 months , DRI supply level in Iran had been limited, therefore billet
producers are facing with limited raw material level. Khouzestan steel co is in
the same situation and can’t reduce billet price much and also can’t rise
supply level. From 24th of August onward, DRI producers can increase
production level as summer time power supply limitations would be finished.
Besides, Gol-e-Gohar Mining co which is biggest DRI producer in Iran and was
closed last 45 days, will start operations actively in coming Iranian month (
from 24th Aug).
Long Products
Long products market was not in a good mood in Iran during
last week. Market insiders agree that it is sick, but mills are trying to
resist this downward pressure by making prices upward without any logical
reason. By last Saturday they made price up by USD 13 /mt. With current higher
billet price as their reason, they were successful to make prices upward. But many
traders have a lot of long products inventory at their warehouses, so they tried
to get rid of them. During last two months, long products market prices surged
upward. This bubble has been made by just a psychologic pressure. If
a trader had bought 63 tons of debar with Rials1 billion ( around USD26,000), 4
months ago, he could sold it with 40% profit till now. If so, he can now buy
just 58 tones with the same amount of money at average price of USD 627 /mt.
Flat Products
Imported HRC 2 mm
thickness, was upward in Anzali Port during last week but declined and finished
the week at same price of beginning of the week. HRC 2 mm thickness started the
week at USD 757 /mt on truck in Anzali including 9% VAT and custom duty. It rose
by USD 8 /mt by Sunday. In domestic market
Thicknesses 3- 15 were USD 653 /mt by average on Saturday and reached USD 684
/mt ex-work including VAT by Wednesday. Oxin co HRP product base price improved
by USD 52 /mt to USD 679 /mt ex-work excluding VAT till Tuesday. There was no
buyer in the market and made price down to USD 674 /mt for sizes 8-40 mm. Inventory
level is high and demand is limited. Sellers are more than buyers in the
market. Kavian co HRP product changed from USD 640 /mt on Saturday to USD 674
/mt by Wednesday. Higher slab price at IME made them upward. Market inventory level is enough and
transactions level is limited, so just higher slab price has made prices
upward.
CRC market was confused. By Monday , Mobarakeh Steel co
increased its base price at IME by USD 66 /mt to sell it at USD 730 /mt ex-work excluding VAT. This made retail
market upward. Till end of the week price improved by USD 52 /mt but demand was
low. Imported CRC price also increased in price by USD 52 /mt as CIS supply level
has been limited currently. Besides, seasonal demand of CRC will improve in
near future in Iran which will made domestic price upward.
HDG
market followed CRC upward trend. Besides, its supply level has declined
currently. Average price of HDG thickness 0.50-1.20 mm increased from USD 909
/mt to USD 937.5 /mt ex-work Kashan including VAT. Seven Diamond co HDG product
thickness 0.40-2.5 mm changed from USD 880 /mt to USD 872 /mt by end of the
week.
Ex-rate:
In free market: Rials 38,290 /1USD
21st
Aug 2017
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Iran
Steel Service Center
IFNAA
News &
Analysis
http://www.ifnaa.ir/en/hom