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Iran Steel Market Trend in week 50

Billet

Last week Iran billet market prices didn''t change as sections market was sluggish like current last weeks. By middle of the week as global billet price rose around USD25/mt , Iran billet market was a little firm. As exchange rate was higher by end of the week, some Iranian billet sellers stopped offering.

Billet market is facing with low demand at the moment, thus Iranian importers are not interested in foreign offers. But the problem in opening LC and increasing exchange rate has made market participants mostly positive about higher billet price in Iran, but it needs higher long products prices also government policy for controlling prices in IME should be stopped.  

Current situation is the best opportunity for domestic billet suppliers to achieve the most from their limited supply level. At the moment imported billet size 120 mm is offered at USD748/mt after custom duty and VAT in Imam Khomeini port and domestic billet of the same size is USD730/mt . CIS origin billet is offered at USD630-640/mt cfr Anzali for 50 days later shipment.

During first 9 months of the current Iranian year around 1,950 million tones of billet has been imported to Iran but at the same months of last year it was 3,300 million tones. Main reasons behind decreasing import level are sluggish sections market and higher domestic billet production.

 

Long products

Long products market didn''t change last week in Iran, it was quiet as current last weeks. Average debar price diameter 8-32 mm, produced by INSIG Co, dropped from USD837/mt to USD835/mt including 4% VAT. Debar Diameter 14-25 mm dropped from USD853/mt to USD852/mt at the end of the week in Isfahan market. I-beam size 14-18 mm dropped from USD974 to USD967.

Generally market participants expect long products prices to increase during coming weeks as its supply level is limited and raw materials prices are expected to rise.

Lack of demand has made traders not interested in increasing inventory levels. Besides traders are sure that sections price would be stable till Iranian New Year. Domestic mills has offered the production of last Iranian month ( 20 Feb-19 Mar) In IME at USD766/mt . During last months of the year mills will be in need of liquidity so we can expect that prices be stable during this period. Besides, exchange rate and demand level would affect the market too.

Many big traders which were out of market during last months, are becoming ready for making deals in coming Iranian  month ( from coming week), to have at least limited inventory for the  beginning of New Iranian Year( start at 20 March 2012) , so Iran steel market would be hopeful about some surge in demand during coming months.

Angle and Channel price were almost stable last week. I-beam size 24 mm or higher was upward because imported inventory of Chinese material has been finished. It is expected that upward trend continue in coming week as import level has dropped from 3 month ago. Prices in global markets have dropped but due to LC opening problems and exchange rate increase, importers prefer to stay out of market.

 

Flat products

HRC 2 mm thickness price dropped by USD10/mt during last week in Iran to USD855-857on truck in Anzali including 4% VAT by end of the week. By Thursday, as exchange rate increased, some sellers stopped transacting but as the product import level has increased during last 2 months and foreign prices have dropped compared to 3 month ago, any rise in prices is unlikely.

During first 9 months of the current Iranian Year around 1,700 million tones HRC has been imported which has dropped by 100,000 tones compared to same period last year. But seasonal weakness and low demand has made prices downward. Price of size 6-15 mm HRC from Mobarake Steel mill has reached the bottom and many traders which have bought it at IME during last 2 months, has lost a lot.   As Mobarake Steel supply level has increased, the downward trend will continue. But for thickness 20 mm or more, shortage of supply has made market almost stable. Although Chinese imported material didn''t let domestic market improve.

CRC market was upward at the beginning of last week. But by middle of the week when import offers increased in northern ports, prices dropped by USD10/mt for some sizes. During last 3 months import level of CRC was upward but low supply of Mobarake Steel and government''s controls in IME has made importers positive about future. Besides drops in offers from foreign suppliers, LC opening problem and exchange rate are the main factors influencing CRC market and its supply level during next 3 months.

HDG market was stable. Mobarake steel offer prices were up but it didn''t influence the market as demand level is too low. Import level has reached the minimum during last quarter and there are some hopes for more demand in the future, so some rises in HDG price is possible. Positive trend in HDG market would affect CRC market too. Market participants are generally optimistic about flat market sentiment during coming months as exchange rate is upward and import level has declined.

Iran Steel Service Center

Dec 18, 2011 16:40
Number of visit : 384

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