Billet
Billet
price was fluctuating during last week in Iran. It started the week at USD 562/mt,
then improved to USD 598/mt, but dropped to USD 568/mt ex-work including 9% VAT
by end of the week.
Price
increase was due to lower inventory of re- rollers, but billet offers at IME were
faced with limited demand due to stagnation of long products market. In fact, billet
supply was met with cautiousness of re- rollers, so, after offers at IME, market
returned which was quite expected.
Long
Products
Rebar market experienced some ups and downs with
demand being limited. Due to higher billet price, it was up from USD 656/mt to
USD 672/mt , but the market did not accept it as became down again to USD 668/mt by end of the week.
I-beam had an upward trend due to market
expectations from USD 657/mt to USD 677/mt. But this trend is not sustainable
because demand is very weak.
Flat
Products
HRC 2 mm thickness ex-work Mobarakeh was USD 1070 /mt on Saturday, which
reached USD 1079 /mt by Wednesday. Mobarakeh Steel co supply trend made HRC
price upward. It’s average price was up from USD 1039/mt to USD 1065/mt by end
of the week.
Lack of demand and higher supply level made Oxin co HRP price down from USD
1210/mt to USD 1189/mt. Kavian co HRP was stable at around USD 1117/mt due to
mill’s market management.
Limited demand made CRC down from USD 1256/mt to USD 1241/mt ex-work
including VAT. HDG market was also downward from USD 1282/mt to USD 1264/mt.
Weekly
Analysis:
This week market
would be half closed due to mid-week Religious Mourning Holiday. Therefore,
demand side cannot have a positive response. On the other hand, global steel
market is downward. The latest forecasts are expecting USD70/mt cfr China for
iron ore price. Based on USD70/mt for iron ore price, billet can be as low as
USD500/mt fob Black Sea. Usually, the market has a downward trend in October
and November, so there is no reason for improvement in demand. But lack of
demand is boosting export level in Iran. On the other hand, this trend encourages
export of raw materials due to stagnation of domestic market. This trend will
cause a shortage of goods in the market within next two months. But in the
current situation, due to high inventory level of DRI and pellet and the
upcoming market closures, there is no potential for upward trend in steel
prices. Neither global market trend nor weak domestic demand would allow this
to happen. Of course, the downward trend of flat products prices will be slower
than long products, because production of flat products is not as competitive
as sections. The government is said to have eased export market activity, but
its impact on the market in the next two weeks is questionable.
Evergrande group
issue in China does not seem to lead to an economic crisis in China either,
because its government supports banks, but if the company falls, it means that Chinese
government is leaving its property market to fall. This would also affect China's
demand for steel. It is, in fact, a shortcut to regulate China's property and
steel markets. China's rapid growth may need a shock to correct itself.
CBI weekly average
ex-rate for Steel Products (SANA): Rials 229,848 USD
26 Sep 2021
Iran Steel News
Bulletin
IFNAA.IR
IRSTEEL.COM