Billet
The price of billet was a catastrophic
collapse, as expected by everyone during the previous week, at the first week
the average price of 150mm was USD553/MTNS and the size of 125mm was USD545/MTNS, but no buyer. From Sunday
prices started to decline up to 25USD/MTNS while buyers retreated from the
market, the downtrend continued until the weekend, the size of 150mm reached USD489/MTNS
and 125mm to USD476/MTNS. Some factories traded a limited stock at a price of USD471/MTNS
for a size of 125mm. But since Wednesday, the fall in prices has stopped,
inventories of factories have fallen to their lowest, while production had
stopped. Most insiders believe that there will be no further price reductions
and billet prices will face a limited increase next week to
reach its balanced price.
The process by which the billet has gone
through the last 6 months was wonderful. The minimum price of billet has been
recorded on April 17, was USD342/MTNS for size 150mm. Since June, the
increasing trend has begun and on Aug 23, it reached to its peak at the rate of
USD579/MTNS for the same size. During this period, another thing happened.
Divided market happened after chaos in prices, this trend led the private sector to take
more market share. On the other hand, the shortage of raw materials identified
the weaknesses of small factories, in particular, rerollers. They were looking
for material while raw materials were used on the export route, the local
market was in the severe need, but there was no consumer demand on the
market, and products were dampened in warehouses. This would push pressure on
producers, especially rerollers to seek maximum use in the shortest time,
because there was risk of flooding cheap stock in the market. Today this risk is
happened, the market is calm and not tense. Now, it's the best time to see the
performance of each unit.
This condition of non-sales and stagnation is
not sustainable, due to the fact that firstly, billet exporting companies have
not yet delivered the previous orders sold at a price below USD500 per tonne
FOB and need sponge iron, sponge iron also is in the shortage of supply. The
scrap is also in the same condition, so the billet problem will continue, the declining trend for billet price is virtually halted, and next week we will
see a limited price increase, while the long products market face horror.
Billet price stability will help long products market and will balance it.
Long Products
From a week ago, everyone was expecting fall
in prices, it happened from Saturday. The average price of 14 to 25mm bars in
Isfahan was USD637/MT on Saturday and USD627/MT in Dezful. On Wednesday, the
average price in Isfahan was USD597/MT and for Dezful USD607/MT. The average
price for I-beam size 140 up to 180mm on Tuesday in Isfahan was USD724/MT,
which fell to USD700/MT by the weekend. The discount race started from Sunday
and peaked until Tuesday. All buyers retreated on this day, while sellers were
looking for sales. market was silent on Wednesday afternoon.
The ingots were discharged from the factory,
the sponge iron was stable and its supply was strictly limited, while scrap was
in short supply. During the three business days, the price bubble for long
products burst. Isfahan Steel products faced near USD5/MT price rises from
Thursday, and other factories looked at positive perceptions to the coming
week. So, they all hoped that the next week's price downturn will stop and the
market will improve while cheap stocks are still in the market, but these
inventories can no longer play a role. Selling these commodities at a price
below the current prices would mean a loss for the traders, because the return
of the price to three months ago is impossible. So the replacement of the goods
will be with loss.
Flat Products
HRC 2mm thickness was traded at USD726/MT in
Anzali on Saturday, but by the weekend it reached to USD695/MT. Some offers
were heard at the price of USD690/MT in the market. The reason for the price
decrease was on one hand, the Gilan products increased in the market to the
extent that all of these products was not sold The second reason was the very
limited market demand, while Mubarak was absent and there was no stock exchange
listing on the stock exchange. The 2.5 to 15mm thickness plates of Mobarakeh's
product rose on Saturday, this trend continued low on Monday. The average price
of 2.5 to 15mm on Saturday was USD668/MT, but by Thursday it fell USD667/MT due
to market weakness and lack of demand. Auxin and Kavian sheets were in a
downtrend. The main reason for falling prices was lack of demand. The average
price of Saturday for thicknesses 12 up to 30mm was USD643/MT and on Wednesday USD628/MT.
The cause of auxin fall beyond demand weakness was for high inventories, while auxin
is settling its last year debts with creditors. These goods were traded at less
than USD515/MT, regardless of how long the owner's money has been on auxin hand,
it is still far away from the market price. A buyer who is tired of this delay
is willing to sell his stock after receiving it. This does not allow the real price
to appear.
The cold sheet was in a downward trend despite
the bullish price hike of dollar over the past week, but there is a huge lack
of demand for CRS, as consumer factories are on holiday and this trend will
continue until the end of September. Average cold rolled sheet price on
Saturday for thickness of 0.40-1.5 mm for Mobarake and CIS products was USD826/MT,
which reached to USD813/MT by the end of the week. In August, Mobarakeh traded
79.742 tons of cold sheets in the exchange market, while in July 89.810 tons, in June 89.924
and in May, 96.107 tons, actually the Mobarake’s offer curve in exchange market
has been on the downside trend. But the Mobareke imports was 37.837MT on May, 28.530MT
on June, 39.548MT on July and 48.422MT on August, while most insiders expect
the September import to be less than 30.000 tons, since orders were recorded in
August was much less than July.
HDG passed a calm week. The average price for 0.40 to 1.5mm thickness sheet of
Kashan product, as the market leader, was USD674/MT during last week. A major
change was not seen in this product, and its demand is weak.
Ex-rate:
In free market: Rials 38830/1USD
3rd Sep 2017
------------
Iran Steel Service Center
IFNAA News & Analysis
http://www.ifnaa.ir/en/home