Billet
Last week billet market in Iran was so silent. State policy for section producer to supply in Tehran Mercantile Exchange (TME) and trying to put prices at stable level in TME, lead to low demand of billet.
During the week, billet size 150 mm price was around US$720/tone fot Anzali Port including 3% VAT with a little fluctuation. Import offer price has reached US$610/t cfr Northern Port. The above factors multiplying with the news about continuing downward trend of billet price made traders adopting wait-and-see policy.
Global billet prices are downward and domestic demand has been stable or drop, so CIS mills should not be hopeful about price rise as the rest of 2010, market for CIS producers would be in dump.
On the other hand a lot of ambiguities in performing subsidy reform plan and related maters has made traders not take risk about purchasing from import market. During coming months construction activities will decrease due to weather conditions and debar demand will drop, government is controlling sections prices not letting them rise, so any upward trend in billet price is unlikely.
Long products
Long products market was quiet last week in Iran and didn’t see any significant fluctuation. On Saturday sections prices were up around 2-3% , but by middle of the week market was relaxed and prices started dropping but finished the week at Saturday’s prices.
Government is controlling sections prices strictly, with new regulations for traders in Tehran Mercantile Exchange; prices of long products transacting in TME would be controlled strictly and it won’t be like a real Exchange market.
By government policy for producers to supply their product in TME and controlling prices, in coming months many mini-mills will face problems. As these producers should buy billet at US$720/t fot Anzali port, after freight rate and converting costs, minimum finished price would be around US$787-796/t. so a few producers would be successful in achieving government goals.
Long products demand in Iran is so limited and inventory levels are so high. As winter is coming and many construction projects will be stopped, demand has become limited and the only factor which may change this trend would be implementing subsidy reform plan and finished prices changes. At the moment producers and customers are acting very cautiously and transactions level so low.
CIS origin debar is offering for US$670/tonne cfr Northern Ports and UAE product is US$650/t cfr Southern Ports.
Flat products
Hot rolled coil price changed a little at the beginning of last week in Iran but by middle of the week market was in a dump. Iranian traders mostly have adopted wait- and – see policy. Flat products prices are dropping in global markets and Iranians demand is so limited too.
Domestic prices of many flat products are lower than import offers, so nobody is interested in buying from import market.
During last Iranian month, 2mm HRC import level decreased to its lowest level since last year. On Wednesday the products price reached US688/t fot Anzali including 3% VAT but its minimum offer price CFR Anzali is US640/t which after custom duty and VAT would be around US$60/t higher, so finished price not less than US$720/t.
CRC market was so silent last week by lowest demand available. Producers mostly prefer to wait for real demand so this lead to very low buying interest.
Kazakhstan origin CRC is US$740/t cfr Anzali which after custom duty and VAT, cost price would be US$902/t Delivered Anzali. Parcels more than 500 tones are transacted by TT payment at this price level.
Last week another problem was in the market about transporting by trucks from Anzali to other cities with so much delay they have. At the end of the week with freight rates increase, some of the delayed parcels were shipped. If this trend continues this week, prices would drop as supply level will increase.
Iran Steel Service Center