Billet
Mourning rituals of first 10 days of Moharram month which had made steel market almost closed, has influenced billet market too. Size 150 X 150 mm was priced at USD559/mt fot Anzali. Last week billet market was shocked by news of subsidy reform plan beginning and this made prices upward. On Sunday, 150 mm billet was priced at USD698/mt fot Anzali and finished the week at USD15/mt higher. Long products market followed this upward trend.
There are many analyses about the influences of energy subsidy cuts on steel market but all of them definitely agree that prices will increase.
Regarding this situation, Iran steel market is very shocked. Last month more than 772.000 tones of billets were imported to Iran, which is the highest level since 3 month ago at 484.000 tones.
During coming months consumption level would be down. As a result, any rise in billet price would be due to higher transport costs and inflationary situation in Iran market, not real demand. Therefore, billet price won’t be higher than current levels. Traders offer imported billet at USD 655-665 /mt cfr Northern Ports.
Long products
Long products prices surged upward during last week. After announcing news of subsidy cuts, transport companies ambiguous about new costs, refused to deliver any cargo. Accordingly transactions were just limited to ex-warehouse inventories.
This situation shocked the market and ambiguities made prices increase more. Some traders found the chance to misuse the situation. There was no pattern for increasing prices, so debar price that was around USD807-845 /mt on Sunday, reached USD 825-898/mt after 3 days. This trend is yet prevailing in the market.
Beside energy subsidy cuts which will end in higher production costs, increasing global prices that won’t be downward at least till next 2 months, has made sections prices upward in Iran. Demand level has not supported price increases and all the purchases of last week were just for stockpiling.
Cold weather, seasonal recession and year end sentiment won’t let sections market improve; so many market participants are waiting for another drop.
Flat products
Like other steel products, flat products prices were upward during last week. On Monday 2 mm HRC price was up by USD15 /mt at about USD692 /mt. Other sizes of HRC were up by around USD10 -30 /mt. CRC around USD12/mt and HDG by USD10/mt.
This upward trend continued and HRC price reached USD730/mt. Leader suppliers have limited inventories in Iran flat products market.
Import levels during last months faced many fluctuations. As global prices were up and domestic prices stable, import levels dropped. Market stagnancy made many investors went out of flat products market.
Any improvement in supply side is unlikely in the near future of flat products market in Iran. Global prices have increased and during last month foreign offers were scarce. During next 3 weeks, CIS suppliers will be out of market due to Christmas holiday, so Iran flat products market should make itself ready for a sudden change.
Iran Steel Service Center