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Iran steel market Trend in Week 19th , 2019


Billet price was almost stable during last week in Iran. Average price of sizes 125 and 150 mm were changed from USD 474./mt to USD 476 /mt ex-work including 9% VAT. Calmness of long products market and ex-rate stability made billet unchanged.

By Wednesday, USA decision about putting sanction on Iran steel export was announced. But sanctions against steel export won’t damage our market. During last Iranian Year we produced 21.5 million tons of steel products when our production capacity was more than 30 million tones. From this amount, 2.9 million tone was exported which means 13% of it. But for semi-finished products, from 24.6 million tone of production, around 4.8 million tone was exported, equal to 19.5%. Total production of billet and slab around 24.6 million tone, but total production of finished steel products 21.5 million tone!! Analysts believe sanctions will make this rate balanced.

It should be noted that billet and slab is being exported in big tonnages of at least 10,000 tones, therefore money transfer process and its ship name can be tracked easily. But till now Iranian producers have continued exporting and definitely will find ways for bypassing sanctions again. Besides, in finished steel products market, our customers are mainly neighboring countries which receive the cargoes by trucks and USA can’t track and stop these transportations or related money transfers. If the government let export payments be done by Iranian Rial payment, then there would be no way for sanctions to affect our export market. If semi-finished products export level decline, it would be a good chance for domestic mills to increase production of finished steel products, therefore, sanction will be a good opportunity for rising our steel production. If export of billet and slab be stopped, flat products production level and then export of pipe and profile will increase and also production and export of debar will improve.  


Long Products

Weekly price level was almost stable for steel long products. Average price of debar on Saturday was USD 531 /mt, which reached USD 540 /mt ex-work including VAT on Wednesday. Since the beginning of current Iranian year, market trend has been upward, but as Iran stock market collapsed, on Tuesday, the market was uncertain and worry that prices will also decline in retail market. By announcing sanctions against Iran steel export, market may become quiet for a week but possible price declines won’t be serious.

Khorasan Steel co sold its debar at USD 529/mt ex-work including 9% VAT and Esfahan Steel co sold at USD 522/mt.

First effects of steel export sanction would be some fluctuation in ex-rate in coming days. If ex-rate declines, export market would be damaged and domestic market will become depressed but any downward trend in prices won’t be significant. But if ex-rate increase, domestic prices will rise too. Anyway, sanctions will improve export level in long term as it is a good opportunity for using steel export as a political instrument. It would be a big opportunity as we don’t have any problem for rising production level and supporting domestic demand and also rising export level. Just we need to focus on exporting finished steel products not semi-finished products. If iron ore pellet, DRI, billet and slab give their export opportunities to pipe and profile, debar and flat products, market equilibrium won’t be damaged as possibility of higher production in these sections is significant.


Flat Products

HRC 2 m thickness was USD 706/mt ex-work Esfahan and USD 665/mt ex-work Ahwaz by last Saturday. By end of the week price rose to USD 737 /mt in Esfahan market. HRC thickness 3-15 mm had a calm market and prices were almost downward.  Price rose from USD 718/mt on Saturday but by Wednesday was USD 707/mt .

The reason behind market sadness was worries about upward trend which made buyers get back. Besides, after two weeks, Mobarakeh Steel co deals were finalized at IME and it sold HRC Class B at USD 583/mt and class C at USD603/mt at IME. These prices seem logical comparing with retail market. HRC market can’t accept more price rises at the moment.

HRP thickness 10-40 mm from Oxin co became cheaper from USD 683/mt to USD 678/mt ex-work including VAT. The mill supply level has increased. But Kavian co is also active in the market and its average price rose from USD 665/mt to USD669/mt by end of the week.

CRC price just changed from USD 851/mt to USD 863/mt ex-work including VAT. Market was completely quiet.

HDG also experienced a quiet week but ex-rate rise and its effect on zinc price made HDG price increase. Market insiders were questioning that how Mobarakeh Steel co sold HDG at base price of USD1216/mt ex-work excluding VAT at IME when the highest retail price is USD1294/mt for thickness 0.40 mm.


CBI weekly average ex-rate for Steel Products (SANA): Rials 97,693/ 1USD

11 May, 2019


Iran Steel News Bulletin

May 13, 2019 08:34
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