Billet
Billet price rose
sharply during last week in Iran domestic market from USD 689/mt to USD 718/mt
ex-work including 9% VAT. lower production level due to power outages made
prices upward. Confusion over government policy, coupled with the non-offering
of billet at IME (Iran Mercantile Exchange) last week, fueled the upward
sentiment.
Long
Products
Concerns about billet
supply shortage changed rebar market sentiment and every one became a buyer. Esfahan Steel co used the opportunity well and
managed to sell its entire supply. Average rebar price rose from USD 745/mt to
USD 775/mt by end of the week.
Limited production
level made I-beam also upward from USD 744/mt to USD 771/mt ex-work including
VAT.
Flat
Products
Mobarakeh Steel co HRC
2 mm thickness was USD 1082 /mt on last Monday, which reached USD 1100 /mt by
Wednesday. 3 to 15 mm thickness HRC was upward due to rumors of a reduction in
Mobarakeh steel co production level, while demand level was at the bottom.
Despite market
expectations, Oxin co HRP did not change much and was around USD 1226/mt. The mill
has export contracts for shipment in August and power outages and hot weather
has made its production slow, so existing prices cannot be sustained if new
demand enters the market.
With management of
the mill and market sentiment, Kavian co had the opportunity to raise its HRP prices
by USD 40/mt to USD 1082/mt ex-work including VAT.
CRC price increased
from USD 1256/mt to USD 1269/mt just due to better market sentiment as demand
level is limited and its consumers are in summer Holidays.
Higher HRC price
made HDG up from USD 1335/mt to USD 1337/mt.
Weekly Analysis:
Power outages
disrupted domestic market system, and DRI producers, were faced with a sharp
drop in demand, therefore they turned to exports. DRI export price is USD 430/mt
, which is more attractive than the domestic market for them. Khuzestan Steel
co DRI offers at IME was not interesting for buyers, and this was an
opportunity for the mill to sign a 50,000-ton export contract for delivery
within the next month.
On Wednesday, it was
announced that billet producers can resume production with 50% capacity, and
this caused long products prices lose the upward momentum.
Price trend in Iran
steel market next week is completely dependent on billet supply level and exchange
rate. If ex-rate has a downward trend and billet price falls, the market will
go into a coma. Some speculators who bought rebar and beams offered on IME last
Wednesday hope to sell them this week, but given that this week is the last
week of the month in Iran, expectation of a recession is very strong. In fact, billet
shortage will be solved this week as the market would be quiet.
CBI
weekly average ex-rate for Steel Products (SANA): Rials 221,798 USD
19 Jul
2021
Iran
Steel News Bulletin
IFNAA.IR