Billet: Due to supply constraints, domestic billet market had an upward trend. The increase in the price of DRI in the stock exchange was the main factor in this price increase.
Long Products
Rebar: The rise in the price of billet led to an increase in the price of rebar.
I-beam: Supply management led to a relative improvement in the price of beams.
Flat Products
HRC: Mobarakeh Steel co market management led to an increase in the price of hot-rolled coil. Regarding 2mm thick HRC, the stagnation of the pipe and profile market led to a decrease in its price.
HRP: The increase in the price of slab was the main factor in HRP price increase.
CRC: The demand for this commodity has dropped sharply, while its suppliers have increased their supply share. The balance between supply and demand has stabilized prices in the market.
HDG: Due to the limited increase in the price of hot-rolled coil, HDG price also increased.
Weekly Analysis:
In the world market: Last week coincided with the closure of the Chinese market, so there was no news of transactions in the Far East. However, it is predicted that from this week, when the Chinese market reopens, due to US restrictions and export duties, Chinese producers will flock to the Far East markets. For this reason, it is predicted that the prices of various metals in the first quarter of the current year will reach their lowest point.
Flat products market is facing very limited demand, which makes buyers very cautious. In the most optimistic case, the price of billet FOB Chinese ports is predicted to be USD410/mt, while iron ore is likely to fall below USD100/mt CFR China again. With the weather getting warmer and the demand for oil decreasing, the price of oil will return to the range of USD70/barrel, which will also have a negative effect on the price of steel.
In the domestic market: Last week, the customs circular prohibited the export of steel and oil products by peddlers, border residents, and their cooperative companies. This ban negatively affected the market's perception of exports, while most exports are carried out by factories or institutions that have connections outside Iran in the name of foreign institutions that are usually tax-exempt. In recent months, we have seen that with the increase in the exchange rate, the export of steel products has increased sharply. There is one positive point in this increase in exports, and that is that in a situation where demand in the domestic market has reached its minimum, exports come to the aid of production. However, there are two negative points in this export, and that is that, firstly, the return of its currency is not guaranteed from the main channel, because in any case, the foreign buyer has to pay the money through an exchange office. The second point is that because this export is done with the free currency, not with the currency of the exchange room, it can be done at least 20% below the export price resulting from the currency of the exchange room. As a result, the price in the destination market decreases. Since the country needs to export, if the gap in the cessation of exports by peddlers, border residents, and their cooperative companies is stopped, the difference must be filled by factories and official exports. This takes time in a situation where we have two months of unemployment ahead of due to cold weather and New Year Holiday sentiment, and in these two months, the industry is faced with the peak demand for liquidity. This circular will create problems for production.
Factors that may lower prices are the reduction of exports with the decrease in demand in the domestic market, but the increase in the exchange rate and the increase in production costs will largely neutralize the effect of the price decrease and will probably lead to an increase in prices until next Iranian year.
CBI average ex-rate for Steel Products (SANA): Rials 665,459/ 1USD
11 Feb 2025
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM