Billet
Billet price was almost stable during last
week in Iran. Average price of sizes 125 and 150 mm were changed from USD 474./mt
to USD 476 /mt ex-work including 9% VAT. Calmness of long products market and
ex-rate stability made billet unchanged.
By Wednesday, USA decision about putting
sanction on Iran steel export was announced. But sanctions against steel export
won’t damage our market. During last Iranian Year we produced 21.5 million tons
of steel products when our production capacity was more than 30 million tones.
From this amount, 2.9 million tone was exported which means 13% of it. But for
semi-finished products, from 24.6 million tone of production, around 4.8 million
tone was exported, equal to 19.5%. Total production of billet and slab around
24.6 million tone, but total production of finished steel products 21.5 million
tone!! Analysts believe sanctions will make this rate balanced.
It should be noted that billet and slab is
being exported in big tonnages of at least 10,000 tones, therefore money
transfer process and its ship name can be tracked easily. But till now Iranian
producers have continued exporting and definitely will find ways for bypassing sanctions again. Besides, in finished
steel products market, our customers are mainly neighboring countries which
receive the cargoes by trucks and USA can’t track and stop these
transportations or related money transfers. If the government let export
payments be done by Iranian Rial payment, then there would be no way for
sanctions to affect our export market. If semi-finished products export level
decline, it would be a good chance for domestic mills to increase production of
finished steel products, therefore, sanction will be a good opportunity for
rising our steel production. If export of billet and slab be stopped, flat
products production level and then export of pipe and profile will increase and
also production and export of debar will improve.
Long Products
Weekly price level was almost stable for
steel long products. Average price of debar on Saturday was USD 531 /mt, which
reached USD 540 /mt ex-work including VAT on Wednesday. Since the beginning of current
Iranian year, market trend has been upward, but as Iran stock market collapsed,
on Tuesday, the market was uncertain and worry that prices will also decline in
retail market. By announcing sanctions against Iran steel export, market may become
quiet for a week but possible price declines won’t be serious.
Khorasan Steel co sold its debar at USD 529/mt
ex-work including 9% VAT and Esfahan Steel co sold at USD 522/mt.
First effects of steel export sanction
would be some fluctuation in ex-rate in coming days. If ex-rate declines, export
market would be damaged and domestic market will become depressed but any
downward trend in prices won’t be significant. But if ex-rate increase,
domestic prices will rise too. Anyway, sanctions will improve export level in
long term as it is a good opportunity for using steel export as a political
instrument. It would be a big opportunity as we don’t have any problem for
rising production level and supporting domestic demand and also rising export level.
Just we need to focus on exporting finished steel products not semi-finished
products. If iron ore pellet, DRI, billet and slab give their export
opportunities to pipe and profile, debar and flat products, market equilibrium
won’t be damaged as possibility of higher production in these sections is significant.
Flat Products
HRC 2 m thickness was USD 706/mt ex-work
Esfahan and USD 665/mt ex-work Ahwaz by last Saturday. By end of the week price
rose to USD 737 /mt in Esfahan market. HRC thickness 3-15 mm had a calm market
and prices were almost downward. Price
rose from USD 718/mt on Saturday but by Wednesday was USD 707/mt .
The reason behind market sadness was
worries about upward trend which made buyers get back. Besides, after two
weeks, Mobarakeh Steel co deals were finalized at IME and it sold HRC Class B
at USD 583/mt and class C at USD603/mt at IME. These prices seem logical
comparing with retail market. HRC market can’t accept more price rises at the
moment.
HRP thickness 10-40 mm from Oxin co
became cheaper from USD 683/mt to USD 678/mt ex-work including VAT. The mill
supply level has increased. But Kavian co is also active in the market and its
average price rose from USD 665/mt to USD669/mt by end of the week.
CRC price just changed from USD 851/mt to
USD 863/mt ex-work including VAT. Market was completely quiet.
HDG also experienced a quiet week but
ex-rate rise and its effect on zinc price made HDG price increase. Market
insiders were questioning that how Mobarakeh Steel co sold HDG at base price of
USD1216/mt ex-work excluding VAT at IME when the highest retail price is USD1294/mt
for thickness 0.40 mm.
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CBI
weekly average ex-rate for Steel Products (SANA): Rials 97,693/ 1USD
11 May,
2019
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Iran
Steel News Bulletin