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Iran steel market Trend in Week 18th , 2019

Billet

Price of billet increased from USD 442/mt to about USD 474/mt ex-work including 9% VAT. Price of DRI was USD 174/mt and pellet was USD 89.5/mt. Pellet supply level is limited, it was heard that an export contract has been closed at a very attractive price, which will show its impact on the market in coming weeks, while DRI supply level is enough at the moment.

However, two factors led to an increase in billet prices:

First: the strength of foreign exchange market

Second: demand of re-rollers which had minimum inventory levels after New Year Holidays in Iran. The issue of long New Year Holidays along with flood-related transport problems pressured their inventory level. Similarly, billet manufacturers, especially those who use DRI as raw material were faced with same problem due to heavy rains of previous month. They couldn’t easily provide their raw material needs.  As a result, their production volume went down.

But regardless of the issue of raw materials supply and production of billet, the rise in price of energy, especially electricity and gas, will raise the price of billet in coming months.

Some market insiders believe that Holy Month of Ramadan will make market slow and prices will stabilize, while others are concerned about rising monetary base. In case of export, there is still no serious impact from sanctions on Iran steel export market, and if the same trend continues in the coming months, expectation of an increase in billet price would be logical.

 

Long Products

Long products prices were upward during last week in Iran. Average price of debar rose from USD 515/mt to USD 529/mt ex-work including 9% VAT on Wednesday. Average price of I-beam was slightly improved by USD 24/mt to USD 486/mt ex-work including 9% VAT . Esfahan Steel Company managed to sell debar baskets in limited tonnage at an average base price of about USD 423/mt ex-work excluding 9% VAT at IME. It was a signal sent to the market that prices will rises. Naturally, in coming weeks, with a wider supply, we should expect at least the same price. Today's market is very turbulent and it seems that Esfahan Steel co debar and I-beam base price at IME is USD 432/mt , while the average price of billet sold at IME is about USD 421/mt!!!

In any case, by the end of the week, price of debar in retail market passed USD 537/mt ex-work including VAT. But market is not expecting an upward trend as by the month of Ramadan demand level both in domestic and export market will decrease.

 

Flat Products

HRC 2 mm thickness started the week at USD 653/mt ex-work Esfahan including VAT and by end of the week was USD 727/mt. Supply was very limited and sellers were cautious. Ahwaz Rolling and Pipe co sold its HRC at USD 611/mt on Saturday, but its price crossed over USD 674/mt by end of the week. But upward trend is not expected to continue as competition level has declined. Average price of HRC thickness 3 to 15 mm from  Mobarakeh Steel co rose from USD671/mt to USD 696/mt , while  supply level was very limited, and buyers were cautiously dealing.

Oxin co HRP price was upward. Average price of thickness of 10 - 40 mm increased from USD 634/mt to USD658/mt. Supply control of the mill made prices upward. Besides by middle of the week it raised production costs sharply, reflecting higher prices in coming weeks.

It's been said that Oxin co has good orders for non-structural sheets that will naturally reduce production of construction products. Kavian co was in the market last week, with offers of thickness 15 to 25 mm. It was heard that production level of the mill will improve.

CRC thickness 0.44 to 2.5 mm average price was traded on Saturday at USD806/mt , by the same day price increase started as market participants became sure that Mobarakeh Steel co won’t increase supply level. As a result, upward trend became faster, until Wednesday, which exceeded USD848/mt. Many thicknesses are almost unavailable in the market and their supply is limited. HDG market also followed the upward trend of HRC and CRC.

 

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CBI weekly average ex-rate for Steel Products (SANA): Rials 94,945/ 1USD

06 May, 2019

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Iran Steel News Bulletin

 

May 6, 2019 10:34
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