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Iran Steel Market Trend in Week 38th , 2014

Billet

Billet market experienced an unchanged week in Iran. Import level has become almost zero but prices are fixed. Esfahan Steel Co sold around 6,000 tones of its billet at base price of Rials15.55 million/mt excluding 8% VAT at IME( Iran Mercantile Exchange). It seems that part of these cargoes have been sold in a barter trade for raw materials. Esfahan Steel Co’s billet is available in retail market at prices lower than IME level, but there is no interest in buying.

Domestic billet size 120 mm was offered at Rials 16-16.2million/mt including 8% VAT with no serious buyer in the market. Imported billet size 150 mm is around Rials 17million/mt and size 125mm is Rials 16.9 million/mt on truck in Anzali including 8% VAT, but long products market is quiet and has affected billet market too.

Market participants expect lower scrap price influence billet market, which also depends on IME price trend.

Price of billet being offered by two market leaders Esfahan Steel Co and Khouzestan Steel Co is around 5-7% higher than billet price offered by small mills in retail market. If these two market leaders reduce base price of billet to Rials15 million/mt, other mills should follow and reduce prices.

Besides, export level of these two leaders has increased and if this trend continues, will help billet price be stable. Domestic billet prices will be more dependent on scrap price and long products demand.

 

Long products

Long products market had a calm week. Debar price was stable at around Rials 17.95-18.2million/mt ex-work . Ex-stock price in Tehran was also stable at Rials18.2-18.5 million/mt but limited deals were finalized. Traders are not interested to restock as final demand is low.

Analysts believe nominal capacity of Iranian steel producers is around 40 % at the moment. Iranian steel producers’ association has asked government currently to support steel market with more bank loans to this sector. Generally, it seems that Iran steel market is not in a healthy situation. If this trend continues, more bankruptcies especially in private sector is near. But many market participants are hopeful about government policies for supporting property market, but it needs some months to show its effects in steel market.

In I-beam market, downward trend in prices is more apparent as inventory levels are high and it doesn’t let prices improve.

 

Flat Products

Hot rolled coil 2 mm thickness was almost stable at around Rials 20.1million/mt on truck in Anzali including 8% VAT. As importing this material is possible by allocated currency from exchange room, so many importers have been eager to import HRC currently. CIS origin HRC is USD570-580/mt cfr Northern Iranian ports and Korean one is around USD600-610/mt CFR Southern Iranian ports. But during last week import transactions were limited and buyers preferred purchasing at minimum level. Price of HRC 2.5-8 mm dropped by Rials 100,000/mt due to low demand.

HRP price was unchanged during last week in Iran, some sizes like 12 mm thickness is in low inventory but prices were fixed.

CRC market was stable despite limited supply of domestic leader, Mobarakeh Steel Co. Buyers are in the market for just immediate needs.

Higher ex-rate helped HDG price improves by Rials 100,000/mt , but market inventory level is high so prices were back again to last week prices by end of the week.

 

Ex-rate:   

In Exchange Room: Rials 26,649/USD       

In free market: Rials 31,900 /USD  

Iran Steel Service Center  

Sep 21, 2014 12:13
Number of visit : 771

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