Billet
Billet price was stable at average of USD 624/mt
ex-work including VAT during last week in Iran domestic market. Higher DRI base price at IME beside limited billet supply level
helped the market to be stable.
Long Products
Despite stability of billet price, rebar market had a downward trend. There were two
reasons behind this trend: First, credit sales of mills and second, the possibility of an agreement in foreign policy and lower
ex-ratre. Rebar market finished the week at USD 721/mt ex-work including VAT.
The downward trend of I-beam market started by
limited supply of size 14, but Esfahan Steel co market management restrained
the tension. It was down from USD 824/mt on Saturday to
USD 820/mt by Wednesday.
Flat Products
HRC 2 mm thickness decreased from USD 938/mt to USD 936/mt ex-work
Mobarkeh by
end of the week. The downward trend of currency rate and market
expectations for more clarification made flat products market loose, but
sellers are resisting against downward trend.
Oxin co HRP price was almost unchanged at USD 892/mt
due to limited supply level and market control.
CRC market dropped with the main reason to be supply
of imported cargoes, which has put pressure on domestic market, while seasonal
demand for this product is decreasing. Its average price
was down from USD 1354/mt to USD 1337/mt ex-work including VAT.
HDG had a stable market at around USD 1332/mt
ex-work including VAT. HRC market price
trend in coming days will affect HDG market.
Weekly Analysis:
In the world market:
The global market is still calm and it is
unlikely to show a change for the next month due to seasonal weakness. Oil is in the range
of USD70/barrel, which keeps billet base price low. Flat products are on a
downward trend. Scarp price is also in the range of USD370 -390/mt. Demand does not seem
to show a serious and rapid change in near future.
In the domestic market:
In the domestic market, the main influencing
factor was political issues and the possibility of an agreement, which
overshadowed all market activities. This market sentiment
pushed back the inflationary expectations, but we have to wait and see the
result in near future. Behind this matter
is the central bank's policy. The government has
injected a lot of liquidity in May and June to the market, the effect of which
will be shown in July and more importantly in August. Therefore, even if
an agreement is made, regardless of the amount of currency or under what
conditions it will be imported, it has already been agreed.
On the other hand, lower ex-rate will reduce
export level which will lead to more unemployment and a larger budget deficit. It does not let
steel and minerals prices to drop too, because steel production chain fills
most of the budget deficit and subsidies, so it is not possible to seriously
reduce price of steel products.
Besides, lower domestic demand due to the
power cuts will increase steel export level. Naturally, the
possibility of a price reduction does not seem serious. We have to wait for
power cuts situation, the effect of which will be clear next week.
CBI average ex-rate for Steel Products
(SANA): Rials 374,009/ 1USD
12 June 2023
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM