Billet
billet price was down by USD 20/mt during last
week in Iran domestic market to USD 704/mt ex-work including 9% VAT. Fixing the
problem of power cuts and increased offer level at IME , increased expectations
of higher supply level and lower prices between market insiders. Main part of the
offered billets at IME was for end- September onward delivery, so it will not
have a serious impact on the market in terms of actual supply, but its
psychological effect was positive. 107,000 tons of billet was offered, with
average base price of USD 621 /mt. Given the price of DRI sold on IME, this
price is close to the bottom price unless DRI price decreases.
Long
Products
Rebar price declined
from USD 785/mt to USD 777 /mt, which was quite predictable. It was cleared from
market recession that rebar price had reached the top. Last week, 85,000 tons
of sections was offered on IME, of which 45,000 tons were sold at an average base
price of USD 682 /mt. Most of these rebar cargoes had a delivery time of more
than a month. This means that rebar price should not be expected to fall sharply.
I-beam market had a
downward trend due to lack of demand. Its average price was down from USD 770/mt
to USD 759/mt ex-work including VAT.
Flat
Products
HRC 2 mm thickness
ex-work Mobarakeh was USD 1143 /mt on Saturday, which reached USD 1215 /mt including
VAT by Wednesday. Mobarakeh Steel offered nearly 100,000 tons of HRC after
three weeks with the payment term of at sight LC, which caused market price to
skyrocket. As a result, HRC market went into a coma on Wednesday, and all
sellers stopped trading. It seems that HRC price has no more room to decrease.
Apart from the issue of power cuts, higher export interest is the main factor behind
HRC high price levels.
Oxin co HRP had a
slight upward trend from USD 1085/mt to USD 1094/mt. It is heard that this mill
will return to the production cycle in coming days after weeks of production cut
due to power outages. Kavian co HRP had a stable market with the mill’s
management closely monitoring the market.
CRC price improved
from USD 1290/mt to USD 1332 /mt by end of the week. Part of this price
increase was due to Mobarakeh steel co performance at IME and the other part
was due to supply level of the mill to the market.
HDG price rose from
USD 1317/mt to USD 1337/mt as HRC price and exchange rate were upward, while its
market was quiet.
Weekly Analysis:
In the coming weeks,
impact of the following factors on the market must be carefully monitored:
1- Domestic market’s
fear of trading volume and a price reduction. This will cause traders to stop
buying and wait for the market to stabilize.
2- Fluctuation of exchange
rate, which with the beginning work of new government, speculations about its
reduction is very strong. A decrease in the exchange rate will cause raw materials
prices to decline.
3- With power
outages problem solved, domestic mills will start exporting to compensate for
the production cuts of the last 20 days. This will affect the market in the
coming months.
4- As new government
activities start, construction budgets will increase and will improve steel
market sentiment.
Above factors can
cause a short-term decline in Iran steel market, but the decline in prices cannot
be serious due to the amount of the money in circulation and higher demand in
domestic and export market.
CBI
weekly average ex-rate for Steel Products (SANA): Rials 223,058 USD
09 Aug
2021
Iran
Steel News Bulletin
IFNAA.IR