Billet market was upward till middle of week 51 and was Rials15,800,000/mt on truck in Anzali including 5% VAT for size 150 mm. Then after declines in ex-rate, billet market became quiet with some downward prices. It finished the week at Rials15,600,000/mt but still no taker in the market. The situation for opening LC has improved but market sadness made importers in wait and see policy. During last Iranian month ( 21 Nov-20 Dec ) total billet supply level in Iran was 340,223 tones compared to 456,879 tones a month ago.
Import level has dropped but domestic producers have gotten more share of the market. It is good news for Iran steel market but it should be noted that at the moment long products market is depressed, so billet demand is low. Any improvement in billet demand is unlikely in coming 2 months. The sadness has ended in lower production of domestic producers too, besides many of them are in cash shortage.
Long products supply shortage won''t be avoidable due to current situation, but it won''t end in any rise in prices as demand level is downward.
Long products prices started the week with some declines but improved a little, by middle of the week. Average debar price dropped from Rials17,513,000/mt to Rials17,250,000/mt including 5% VAT. I-beam average price decreased from Rials17,360,000/mt to Rials 17,200,000/mt in retail market.
Low demand has forced many longs producers to cut production. Base price of debar at IME after VAT would be Rials17,325,000/mt but it is offered at lower prices in retail market. A reason behind the gap is cheap offers from China and UAE at Southern ports which were offered at Rials17,000,000/mt or lower during last month.
At the moment traders are less interested in buying at IME. Some market participants hope that lower supply level help prices, but when demand level is low it won''t happen unless demand improves.
HRC 2 mm thickness was offered at Rials19,300,000/mt by Saturday but started dropping to reach Rials19,000,000 and rise again to end the week at Rials19,200,000/mt on truck in Anzali including 5% VAT. Domestic production price dropped by Rials150,000/mt.
Supply level has increased in flat products market. It increased from around 354,000 tones to 372,000 tones during last Iranian month. The rise in supply level beside low demand was just a chance for the buyers.
In CRC market, supply level dropped from around 91,000 tones to 72,000 tones during last Iranian month, but its price was downward last week. Import level also dropped from 7,800 tones to 4,400 tones during same period.
HDG market is in the same situation. Its supply level dropped from around 19,500 tones to 13,900 tones and import level was downward, although demand level was declining like other flat products.
Many market participants believe if the current situation continues, Iran steel market may face problems during coming months, unless demand level increase significantly.
Iran Steel Service Center