Billet: Iran domestic billet price trend did not change seriously according to its demand. Despite the fact that supply was very low, all the billet offered in the IME ( Iran Mercantile Exchange) were bought.
Long Products
Rebar: Supply limitation has stopped rebar demand, that's why its price, which has reached the bottom, did not change seriously during last week.
I-beam: Closure of markets due to hot weather caused I-beam price to fall.
Flat Products
HRC: The decrease in HRC supply is slowly showing itself in the market, which had a positive effect on prices but prices dropped again at end of the week.
HRP: Lower supply made Oxin co HRP price upward.
CRC: Due to power cuts and stable demand, CRC price did not change significantly.
HDG: Higher HRC price caused an increase in HDG price, and like HRC, at end of the week returned again.
Weekly Analysis:
In the world market:
The global market is still in recession. Fall of stocks in the world markets needs at least three months to return to the normal level. Oil price has decreased due to the global recession, continuation of regional wars continues to question investment, and all these factors cause the continuation of stagnation in the steel market. In the current situation, tradeble price of steel is close to its cost price and it is unlikely to decrease much.
In the domestic market:
In Iran domestic market, according to current report of Steel Manufacturers Association, utilization rate has reached 65%. Currently there are 17 million tons of empty capacity in this sector, while issuance of permits and construction of steel production lines are still ongoing.
The problem of electricity, gas and water becomes more prominent every day and we are in an energy crisis. This has caused closure of production units and suspension of administrative ones. As a result, the domestic production goes back step by step. If the government starts building power plants today, this reduction in capacity will be compensated in 5 years, but during these 5 years, the annual growth of 4 to 5 percent of electricity consumption will create a deficit again.
In the short term, the power outage will decrease in September and production will probably return.
In the meantime, the discussion of prices in coming months is a matter of dispute among those involved. A group believes that the steel industry should compensate for the loss of production during last two months, and since consumption is weak, the government will be pressured to increase export. Therefore, on the one hand, finished cost prices will be higher, and on the other hand, domestic market supply will not increase significantly. The second view believes that with the increase in supply of billet, precautionary demand will retreat and prices will take a downward trend. However, the scope of the price drop won’t be large. It should not be forgotten that during last two months warehouses have been emptied and traders are waiting for the clarification of the market situation and the price trend depends on their point of view too.
CBI average ex-rate for Steel Products (SANA): Rials 443,069/ 1USD
12 Aug 2024
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM