Iran Steel Market Trend in Week 03rd , 2015


Billet price was downward during 3rd week of 2015 in Iran. Esfahan Steel Co offered billet size 150 mm by Wednesday at IME and succeeded in selling 21,000 of it at Rials14.05 million/mt base price. As long products demand level is at the bottom, more declines in billet price is likely. But market participants believe price decline won’t be more than Rials1million/mt. If prices decrease more, many small mills will face bankruptcy. Khouzestan Steel Co also offered 30,000 mt of its size 150 mm billet at IME with base price of Rials14.05 million/mt the same day as Esfahan Steel Co but couldn’t sell any tonnage.

Billet price has reached bottom in global markets and it is being offered at USD390/mt cfr Anzali port in Iran. Market participants are concerned about Chinese billet competition as they would accept any decline in prices to save their share of the market. Lower iron ore and crude oil price has led to lower cost price and also decrease in freight rates.

At the moment Iranian leader mills have competitive strength for domestic supply, so Chinese billet is not being imported to Iran. But demand level is low and prices are downward, so market future trend is not positive.


Long products

Long products market experienced one of its most quiet weeks in Iran. Debar price declined by Rials300,000/mt, but it didn’t help transactions level. Market participants are staying out of market expecting more declines in prices which is a logical anticipation in current situation. Real demand level is also scarce. All these negative factors talk about more downward prices in near future.

If this situation continues and buying interest doesn’t improve, long products market would experience a crisis. Other long products like I-beam, angle and UNP were also downward. As Angle and UNP price dropped by Rials200,000-500,000/mt and I-beam price was down by Rials100,000-500,000/mt.


Flat products

Price of HRC 2 mm thickness declined significantly during last week in Iran. It decreased from Rials18.7million/mt to Rials17.9million/mt on truck in Anzali including 8% VAT due to three main reasons as following:

1- Lower ex-rate.

2- Lower global prices and extreme competition between CIS and Chinese suppliers.

3- Arrival of around 200,000  tones of HRC 2 mm thickness which were stockpiled in Astrakhan port due to wintery condition.

Market participants expect HRC price downward trend continue and reach Rials17.5million/mt including 8% VAT. Importers are facing with huge loses at the moment and many small traders are stopping ordering. Downward trend in prices will be faster and heavier. It is expected that within a short time HRC price would decline by USD50-70/mt. It may be noted that at the moment freight rate from China to Iranian ports is the same as from Astrakhan to Anzali port. Besides, lower Ruble rate against US Dollar has made Russian pipe and profile more competitive in Iran's traditional export markets. The only solution to this problem would be change in ex-rate or new policies to support Iranian pipe and profile exporters.

price of HRC 2.5-15 mm thickness dropped by  Rials 100,000-300,000/mt. Supply level was low but sellers prefer reducing inventory level today than selling at lower prices in near future. This policy made downward trend faster.

Oxin co offered HRP in the market. Besides, Chinese product was available in Imam Khomeini Port. Market was quiet, with lack of activity the common trend.

CRC market experience downward competition between importers as Kazakhstan origin CRC  average price was down from Rials 23.4 million/mt to Rials 22.2 million/mt on truck in Anzali including 8% VAT.

Some participants think importers are yet making profit from current prices, so there is room for more declines. It should be noted that importing HRC thickness more than 3mm, CRC thickness more than 1mm, HDG thickness more than 1mm won't receive currency allocation from exchange room anymore, so their cost price would increase at least 18%. Global prices are dropping quickly but it won't cover all this 18%. Therefore many market participants expect CRC downward trend stop in near future.

HDG price was downward like CRC. It dropped by  Rials 300,000/mt.


In Exchange Room: Rials 27,383/1USD       
In free market: Rials 34,420 /1USD 
Iran steel service center


Jan 18, 2015 11:14
Number of visit : 473


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