Billet
Billet price improved a little during
last week in Iran domestic market from USD 603/mt to USD 605/mt ex-work
including VAT, the reason was higher base price at IME ( Iran Mercantile
Exchange) and lower supply of ready to deliver cargoes.
Long Products
Thanks to the increase in base prices at IME
and supply limitation of many mills, rebar average price went up a little from
USD 710/mt to USD 712/mt ex-work including VAT. Many mills have started selling
goods with letters of credit, and this has affected market trend.
I-beam price remained almost stable. It
changed from USD 821/mt to USD 812/mt. Esfahan Steel co
delays in delivering cargoes has disappointed market participants which may
became worse if considering possible power cuts.
Flat Products
HRC 2 mm thickness decreased from USD 964/mt to USD 925/mt ex-work
Mobarkeh by
end of the week. With the resistance of suppliers, prices were
adjusted from Tuesday onward.
Oxin co HRP price changed from USD 894/mt to USD 877/mt by end of
the week. Two big contracts have been offered to Oxin co, which will probably affect
its prices.
Due to the decrease in the price of some
sizes, especially thicknesses 0.50 and 0.60, average price of CRC was downward
from USD 1346/mt to USD 1335/mt ex-work including VAT.
HDG market was stable at around USD 1312/mt
during last week in Iran domestic market.
Weekly Analysis:
In the world market:
World market is still in recession and demand
is weak. Chinese steelmakers
profit margin is downward. Unemployment rate
China is increasing, especially among educated young population, if it
continues, this situation can be a warning for the steel market. Turkey market, which
signals scrap market, remains weak after the election. The main indicator,
which is the price of oil, has fallen, also gas has returned to the prices of
about two years ago. Last week, US
government's debt ceiling news also affected other countries and disrupted
their stock market.
In the domestic market:
The domestic market remains at a decision
dilemma. If political
agreements are made, it is expected that the ex-rate will decrease. Of course, those
involved in the market do not hope for a serious drop in the price of the
currency, because it will cause the stock market to fall and, as a result,
Iran's export level will decrease. The entry of foreign
currency to Iran will help the government pay its debts to the banking system,
as a result, the ability of banks to lend more will increase.
If the negotiations do not come to a
conclusion, then currency rate will increase and cause the market to be
disrupted. But the main problem
is production infrastructures, especially electricity and transportation. Power cuts will
reduce production level and will mess up plans of the steel chain, which we saw
parts of it last week. Since the beginning
of this year, problems in transportation section has started to appear in many
cases too.
Currency issue alone cannot solve structural
problems, besides, more availability of foreign currency, activation of bank
facilities and higher demand will make these structural problems more prominent.
CBI average ex-rate for Steel Products
(SANA): Rials 379,598/ 1USD
06 June 2023
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM