Billet
By last week in
Iran, billet price continued its downtrend trend until Wednesday. Average price
of billet size 150 mm declined from USD 322/mt on Sunday to USD 318/mt ex-work
including 9% VAT by the weekend, while for some mills it was heard under USD
316/mt. Khuzestan steel co sold 30,000 tons of its billet on last Tuesday at
the lowest level of current Iranian year at USD 293/mt at IME ex-work excluding
VAT. In February, this commodity was traded at USD 321/mt at IME, which peaked
after it and reached USD 382/mt in May
2019, then downward trend began.
The current price of
billet is lower than 5 months ago, while wages, energy costs, insurance and
transportation rates have all increased. Naturally, this price cannot be
sustained.
When billet was sold
at IME last February at such price, DRI base price was USD 97/mt. However, Gol-e-
Gohar Co DRI was traded last Wednesday at USD 151/mt, but this was previously
purchased cargo, with a small amount remaining. However, DRI base price will
not be lower than USD 160/mt in coming
weeks.
Therefore, despite
the fact that price of raw materials affecting billet pricing have been risen
by at least 13% since last Iranian year, price of billet stays at a level lower
than 5 months ago.
Since billet price has
reached its bottom, market came to believe on Wednesday that price would not be
lower, so the stalled demand slipped into the market, causing billet price to
rise. While sellers stayed back.
At the moment Iran
steel market needs political calmness and better export level to improve.
Main hope is Iraqi
market, which is currently in weak demand. In Iran billet market, it is not
possible to forecast for next month, as the factors affecting the price of this
commodity are not just economic issues.
Long Products
Debar price continued to decline during last week. From the average
of USD 385/mt to USD 373/mt, but by Wednesday afternoon sales were closed, due
to the fact that market couldn’t resist more and all traders and mills have
been losing during the past month. The most important factor was the issue of
liquidity. Beside the factor of profit margins, mills can’t buy billet due to
significant drop of their debar sales. Downward trend in billet price had also
limited the incentive to absorb more liquidity in steel market. All these
factors have led to a reduction in production. As demand improved, shortage of
debar and therefore lack of billet showed itself which will be more clear this
week.
I-beam market trend was different and did not show any significant
change on Wednesday, as its demand condition is different, which led to its decrease
from USD 373/mt to USD
367/mt ex-work including 9% VAT.
Flat Products
HRC 2 mm thickness started week 27 at USD 514/mt ex-work Esfahan
and USD 488/mt ex-work Ahwaz including 9% VAT. Sellers were eager to deal
especially for Ahwaz cargoes, this competitive situation led to lower prices by
end of the week as Mobarakeh Steel co HRC reached USD 492 /mt ex-work Esfahan
and Ahwaz product was USD 466/mt. Beside lack of demand and negative market
forecast, lower price of Mobarakeh Steel co for new offers at IME had a
significant role in this downward trend.
Last week, price of HRC Class B was down at IME
by USD 38/mt compared to 2 weeks ago to reach USD 436/mt and class C with USD
41/mt decline to reach USD 439/mt .
For this
reason, average price of Mobarakeh Steel co products for thicknesses 3 to 15 mm,
fell from USD 527/mt to USD 506/mt.
Average price of Oxin Co HRP, which was USD 494/mt
ex-work including VAT on Sunday, fell to USD 481/mt on Wednesday, but since
Wednesday, sellers stayed back because they were facing with losses. Oxin co HRP
price is closely related to price of slab.
CRC market was downward. Part of the fall in
price was associated with the seasonal recession and start of summer closures
at mills. Average price on last Sunday was USD 673/mt , reaching USD 652/mt at
the end of the week. Demand level is low, while Mobarakeh steel co has cut its
price for CRC by USD 22/mt between its two recent offers at IME.
HDG price fell from USD 804/mt to USD 771/mt,
which resulted from lower HRC price and a fall in exchange rate.
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CBI
weekly average ex-rate for Steel Products (SANA): 113.719 Rials / 1USD
08 July,
2019
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Iran
Steel News Bulletin