Billet
Last week, billet market reacted to the
price squeezes caused by the wrong policies. With the start of exports in
January, supply of billet dropped sharply in domestic market. Cold weather and low
margins, made billet production level drop. From the end of the month, billet
shortage was very clear. This made billet production not economical as efficiency
rate declined. Export contracts of previous month helped market sentiment as
base price of Khouzestan Steel co billet rose from USD 330 /mt to USD 377/mt
ex-work excluding 9% VAT. Supply level was 30,000 tones but demand was around
146,000 tones.
As billet price rose, DRI price improved
from base price of USD 143-145/mt to USD 153 /mt ex-work excluding VAT. Some
market participants expect billet reach peak at USD 435.5 /mt including 9% VAT.
Then upward trend will stop.
The fact is that majority of debar producers will have high demand in
coming days and billet market would be active. Higher billet price has made
debar market active with its cost price higher than USD 458/mt ex-work
including 9% VAT. But next week market would be almost close due to public and
religious Holidays.
Long products
Long products were on the upside trend from Saturday to Tuesday
last week, but on Wednesday, with a sharp rise in billet price, debar price suddenly
rose. Average price on Saturday, was USD 420/mt, it reached USD 441/mt by
Tuesday, then by Wednesday became USD 461/mt ex-work including 9% VAT. Reasons behind
this sudden rise were:
1-Limitation of billet supply
2- Higher Export during January
3-Improved exchange rate
4-Market expectations for higher prices
With a sharp rise in debar price, market was stopped, which was a
natural reaction.
Esfahan Steel co sold debar and I-beam at
average base price of USD 392/mt at IME. But around ten days ago it was sold at
USD 369/mt with delivery till first week of March. Construction
projects are minimized and practically consumption is low.
Esfahan Steel Co will have to supply many products in coming days,
possibly with higher prices.
Flat products
HRC 2 mm thickness rose from USD 550/mt
ex-work Esfahan to USD 584 /mt till last Wednesday. Ahwaz Rolling and Pipe co product which was
not in the market till last Tuesday, rose from USD 539/mt to USD 573/mt ex-work including 9%
VAT till end of the week. Price for thicknesses 3-15 mm increased by around USD
18/mt to end the week at USD 541/mt ex-work including 9% VAT.
Limited supply level and market
expectations made prices improve. But after next week’s holidays, last
purchases of Mobarakeh Steel co products will be in the market and participants
are waiting for direction.
HRP thickness 15 mm or higher was also
upward, due to limited supply of thickness 25 mm or higher which has put market in trouble. It
is said that supply of these products will increase in coming days, in which
case its price will Decrease. Average price rose from USD 470/mt to USD 497 /mt
ex-work including 9%
VAT.
CRC market experienced a steady but
rising market. Average price of CRC thicknesses 0.40 to 2.5 mm, which was USD 713/mt
last Saturday, reached USD 724/mt by Wednesday.
HDG market was quiet and inactive and
there was almost no change in prices. Perhaps any change in price of flat
products at IME indicates a recovery in price of HDG.
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CBI weekly
average ex-rate for Steel Products (SANA): Rials 87,254/ 1USD
04 Feb,
2019
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Iran
Steel News Bulletin