Billet
Billet price was on
the rise during last week in Iran domestic market from USD 646/mt to USD 660
/mt ex-work including 9% VAT while everyone was expecting downward movement in
the market. Market making at IME ( Iran Mercantile Exchange), New regulations
announcement by the authorities and higher ex-rate were the reasons behind
higher billet price.
Long
Products
Rebar price went up
from USD 710 /mt to USD 719/mt ex-work including VAT. Higher billet price and
currency rate increase caused the upward trend. While demand side has become
extremely conservative.
I-beam price rose
slightly from USD 719/mt to USD 730/mt but its market was stagnant.
Flat
Products
Mobarakeh Steel co HRC 2 mm thickness was USD 1065/mt on last Monday, which
reached USD 1083 /mt by Wednesday. HRC average price rose slightly due to higher
ex-rate and limited supply level.
Oxin co HRP had a relatively steady trend but its market was very stagnant.
Its price rose by USD 11/mt to USD 1230/mt by end of the week. Kavian co HRP
had a steady trend due to mill control and market stagnation at around USD 1083/mt.
CRC price declined from USD 1297/mt to USD 1290/mt as Mobarakeh Steel co
declined its price at IME. HDG didn’t change significantly due to stability of HRC.
It was down from USD 1346/mt to USD 1341/mt by end of the week.
Weekly Analysis:
Several factors can
affect prices. Possible factors behind a downward trend would be:
1- Signing of the
Nuclear Deal and lower ex-rate. This positive factor cannot last much because
imported currencies, if converted into Rials, will increase the monetary base.
Given the need of mills for banking facilities to move on and improve the
economy, this is not far from expectation.
2- Price
reduction in global markets. Global markets have been stable over the past two
weeks and have experienced limited volatility. Given the volume of money
printed worldwide, the probability of a price reduction in the short term is
limited.
3 -Increasing
interest rates in the United States to control inflation, which would reduce
demand in that country.
The possible factors
that may keep the steel market rising or prevent its price from falling are
mainly:
1-India's exit from
the pandemic situation. This diminishes India's role as a mail steel supplier in
the world.
2- Higher oil price,
which would affect all goods prices, especially freight rate.
3-The third factor
that is very important is the start of the production cycle in Iran, which will
increase demand in the domestic market.
4-The fourth factor
that is rapidly changing the market is the new regulations for export of long
products which will increase export level in the short term.
5-The fifth issue is
power outages at production lines, which will reduce production and put
pressure on supply level.
CBI
weekly average ex-rate for Steel Products (SANA): Rials 215,987 USD
05 Jul
2021
IFNAA. IR