Billet
Billet price went down from USD 601/mt to USD 579/mt ex-work including VAT. The reason was downward
currency rate and weak demand. On Wednesday, with the
announcement of DRI price, which had a noticeable decrease compared to last
week, billet price hit the bottom.
Long Products
Down ward currency rate delayed rebar demand, and
this caused its price to decline from USD 705/mt to USD 687/mt by end of the
week.
The psychological atmosphere prevailing in the market made I-beam price also
downward from USD 783/mt to USD 759/mt ex-work including VAT.
Flat Products
HRC 2 mm thickness decreased from USD 930/mt to USD 903/mt
ex-work Mobarkeh by end of the week. Mobarakeh Steel co
market management made HRC market almost stable.
Oxin co supplies along with the halt in demand caused HRP price to fall from USD 865/mt
to USD 854/mt ex-work including VAT.
Downward ex-rate expectations along with decline in demand level made CRC
price also down from USD 1324/mt to USD 1276/mt by end of the week.
Lower demand and ex-rate caused HDG price to fall from USD 1307/mt to USD 1269/mt
ex-work including VAT.
Weekly Analysis:
In the world market:
In the global markets, prices have reached the bottom. Despite the news
coming from the markets indicating that the downward trend has stopped, there
is no hope for an increase in prices in the short term as it is summer holiday
season in Europe and USA and rainy season in the Far East.
Chinese government is trying to stimulate its economy by lowering interest
rates and increasing bank credits. Signs of social
tensions, such as the increase in unemployment among young people has forced
the government to adopt methods to stimulate economic growth. Political
movements in the Middle East will improve more economic prosperity but this won’t
work in short term.
In the domestic market:
In the domestic market, government's policy is to make prices downward in
order to limit inflation rate on the one hand and to strengthen export on the
other hand. For this purpose, the government took three policies through the mercantile
exchange including limiting demand level, increasing supply level and the
downward pricing policy. With this policy,
along with expected inflation reduction, due to hopes for economic openings and
the return of blocked currencies, the market went into stagnation. It is
predicted that the floor price of billet will fall to below USD 538/mt in the
coming days. While the price of
export billet is at least USD 480 /mt. It Seems the government has reached its
goals. The second goal of the government, which was to increase export, has
been achieved during the last quarter, the export of semi-finished steel products
has grown by 33%, the export of flat products by 40%, and the export of steel
beams by 108% and DRI by 204%.
The downward trend of prices due to the pressures of government and the
psychological atmosphere of the market has led to the point that only 23,933
tons of the 192,957 tons of rebar supplied in the IME were traded on last Wednesday. This trend, along with
the restrictions of banks' facilities, has increased liquidity problems of
mills. Naturally, they will
not afford to buy billet. Failure to buy billet
in the commodity exchange will cause its price to fall for the coming weeks, in
this way, the problem of liquidity will be transferred to small producers of billet,
especially induction based ones, will put them under severe pressure and production
may stop. If the government does
not change its policy and direct the domestic market to stability, this month
will be very turbulent.
CBI average ex-rate for Steel Products (SANA): Rials 371,934/
1USD
26 June 2023
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM