Billet
Due to weak demand and a limited decrease in currency prices, Billet had a downward trend. It was USD590/MT at the beginning of the week and closed to USD580/MT (ex-work including VAT) at the end of the week.
Long Products
The very stagnant market caused by the dead demand was the main reason for the downward trend in prices. Debar price was at USD 691/MT at the beginning of the week, and it declined to USD 682/MT at the end of the week.
I-Beam had a relatively calm market, and market stagnation and rumors about Esfahan Steel Co. helped this trend. I-beam price fluctuated between USD748/MT – USD753/MT ex-work, including VAT.
Flat Products
HRC 2 mm thickness decreased from USD917/MT at the beginning of the week to USD890/MT ex-work Mubarkeh by the end of the week. Weak demand caused prices to fall. Also, Power outages in industrial cities intensified the fall.
Oxin product steel sheet was traded at USD853 at the beginning of the week and declined to USD849/MT (ex-work including VAT) at the end of the week.
Weak consumption of CR Coils, along with power outages in industrial units, have decreased this product price from USD 1276/MT to 1267/MT. These factors caused HDG price to fall from USD1269/MT to 1249/MT (ex-work including VAT).
Weekly Analysis:
In the world market:
The global market is still disappointing. Neighboring countries are closed for Eid al-Adha. Should wait for the events after the holidays. The Chinese are still active in the market due to overproduction, and this causes uncertainty of the entire outlook.
In the domestic market:
The demand is confusing in the domestic market. The cost of gas and electricity has increased, but on the other hand, the government does not allow an increase in final products. This confusion has made the market cautious and caused the demand to retreat.
Low currency prices due to Eid al-Adha added to the market’s wait-and-see situation.
The government goal is to increase supply to lower the prices. It has lowered the price of DRI and pellets, which include billets and sections. This policy, along with doubling the cost of gas and electricity, makes the producer's profit and survival doubted. Along with that, there is a liquidity problem in factories and limited bank facilities, which stop production.
The government is trying to control inflation and fill the budget deficit. It increases the cost of gas and electricity but does not allow the price of products to rise.
It is quite clear that the government's budget deficit is not an issue that can be solved by gas and electricity costs, and this policy does not work. The government hopes to fill the gap of domestic consumption with export thriving and does not pay attention to the economic equations and the private enterprises.
Should wait and see if the government's policy works or not; of course, it will not take long.
CBI average ex-rate for Steel Products (SANA): Rials 371.734 / 1USD
03 July 2023
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM