Billet
During last week Billet price was up by US$50/mt in Iran market and reached US$710/mt fot northern port including 3% VAT.
Factors influencing the upward trend of billet market include rising sections prices especially for A3 rebar and I-beam, more uncertainties regarding sanctions against Iran and higher CIS billet price.
Some traders are misusing the current situation. They cancels bookings with prices under US$500/mt cfr Anzali because of sanctions and sells ready to deliver cargoes for US$600/mt by TT not LC.
Latest offer price of imported billet was US$630/mt but suppliers increased offer prices to Iranian customers by US$40/mt during last week.
In this situation, if Esfahan Steel increases rebar supply and its price became more balanced and reasonable, billet price would be more stable too.
Long products
By the beginning of last week, long products market shows signs of improvement in Iran and most market players were offering cautiously. Many factors are influencing these rising prices. One of them is the current market sentiment regarding more sanctions against Iran and possible cuts in import offers. The second is limited supply of domestic producers, especially Esfahan Steel. Some sources say the mill would ship just 80,000 tones for next Iranian month (begins at 23rd August) which is not enough.
Iranian government is trying to control the market by freezing prices in Tehran Mercantile Exchange. Mills are trying to limit their supplies due to nearing performing phase of subsidy reform plan in autumn, to make price increases possible in the future.
Any way it’s unlikely for prices to drop and any sudden surge after Ramadan is possible.
Due to sanctions against Iran, at the moment no serious offer is available in import market. It’s notable that Iranian sections producers have potentials for increasing capacity but market uncertainties regarding subsidy reform plan has increased ambiguities.
Flat products
Iranian flat products market was so volatile last week. Hot rolled coil 2 mm tick which was US$ 650/mt fot Anzali port at the beginning of the week, moved up to US$690/mt and down again to US$ 675/mt till the end of the week.
HRC 2.5-4 mm of Mobarakeh Steel mill was transacted for US680/mt in Esfahan market including 3% VAT and didn’t change during the week. Prices of other sizes were almost stable too.
CRC price was up around US$20-30/mt during last week and HDG market trend was the same.
Flat products buyers avoid importing in the current situation. They have to buy in cash and their cargoes will be delivered after 3 months, so they should take high risk. As a result, they prefer to take part in Iran Mercantile Exchange instead of import market.
Participants in Iran Mercantile Exchange are trying to keep prices stable and limited supply is continuing too. Rmadan market sentiment and uncertainties regarding government subsidy reform plan couple with the fact that flats demand would increase not sooner than second half of the year, has influenced the market.
In import market, HRC 2 mm tick, CIS origin is offering for US$620/mt, CRC of kazakhstan origin about US$730-750/mt and Chinese HDG is US$ 890-910/mt cfr Iranian ports.
Iran Steel Service Center