Billet
Billet price was on a downward trend during
last week in Iran domestic market from USD 575/mt to 562/mt ex-work including
VAT. The main factors were lack of demand and lower exchange rate.
Long Products
Downward rebar price, like previous weeks, was
caused by weak demand, withdrawal of customers and lower exchange rate.
Its average price dropped from USD 663/mt to USD 650/mt ex-work including VAT
by end of the week.
I-beam market like other long products was
down due to limited demand from USD 700/mt to USD 668/mt.
Flat Products
HRC 2 mm thickness decreased from USD 855/MT at the
beginning of the week to USD 846/MT ex-work Mobarkeh by end of the week. Market participants’ cautious attitude made
prices downward.
Oxin co HRP was faced with a decrease due to absent of demand and
competition of some suppliers. It was down from USD 847/mt to USD 831/mt ex-work including VAT by
end of the week.
CRC had a downward trend from USD 1193/mt to USD 1154/mt due
to lower demand and closure of consumers’ production lines.
Lower HRC price
and downward currency rate along with the decrease in demand reduced HDG price
from USD 1238/mt to USD 1190/mt ex-work including VAT.
Weekly Analysis:
In the world market:
Demand in global markets remained weak. Downward trend of
scrap price has affected market of billet, slab and long products, and as
expected, billet price reached USD450/mt fob Black sea and lower. Considering
the global recession, possibility of changing the current condition in short
term is very unlikely, but it seems that prices are approaching the bottom level
globally. billet is likely to
drop to $420, which may help stabilize prices and return demand.
In the domestic market:
As it was mentioned previous weeks, downward trend
of prices will continue. The reason is, first
of all, the government's pressure to reduce prices and downward trend of global
markets. This trend will
continue next week because market would be almost closed due to the mourning
ceremonies of the month of Muharram, and traditionally transactions level have
a sharp downward trend.
The events that happened last week will be
historic moments for the steel industry. According to the
budget, the government had the duty to increase price of gas, electricity and
water, but during the first quarter of the year, it did not take any action on
this matter.
On the other hand, duties should have been
considered for export of steel, which was a continuation of last year's
circulars, but it was not announced to the steel sector during last 4 months, now as it was announced is considered as
ex post facto. As a result, all steel
exporters are required to pay the relevant duties for the exports made in the
previous months too.
On the other hand, in a situation where the
demand has severely retreated due to the drop in currency prices and the
suspension of construction projects, the government is seeking to collect past taxes.
In fact,producers are facing with a liquidity
problem on one hand, and on the other hand, heavy obligations from the
government and power cuts have also added to this challenge.
The result of these events would be stoppage of production and bankruptcy of
producers and traders.
It seems that in domestic market DRI price will
reach below USD 296 /mt and billet to USD 485/mt, but it is not clear how much
production capacity is left until that time.
CBI average ex-rate for Steel Products
(SANA): Rials 371,788/ 1USD
24 July 2023
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM