Iran steel market Trend in Week 39th , 2019

Iran steel market Trend in Week 39th , 2019


Billet price remained stable last week in Iran and did not change significantly. On last Saturday it was at an average of USD 334/mt and decreased to USD 333.5/mt by last Monday but increased to USD 335/mt ex-work including 9% VAT by Wednesday. This was due to the relative increase in billet price at Iran Mercantile exchange (IME).

Market participants believe this small rise was due to market leader Khouzestan Steel co policy as whenever market is downward, starts supplying with credit payment of 90 days to improve market.  

Iran billet market is now at a crossroad:

A. At one hand, it seems impossible that billet price reduces more as billet cost price is at the bottom according to price of DRI, scrap, transport costs, wages and other factors influencing its price.  If DRI price decline, billet market will be affected severely.

B- On the other hand, prices are expected to fall.

Lower Price expectations are strong for several reasons. The government's attempt to lower prices or maintain the current status would be a main reason.

But the most important factor to keep in mind is the start of the Holidays in China, which starts this week and traditionally will lead to a drop in demand for the world's largest steel consumer. As a result, the likelihood of export decline is very strong too.

Long Products

Debar price was down slowly last week. Average price of diameters 8 to 32 mm on Saturday was USD 378/mt, which fell to USD 376/mt ex-work including 9% VAT by the end of the week. There are several reasons for this downtrend, for example implementation date of latest new regulations for export of debar has been delayed based on authorities’ policy to control prices. Actually at the moment price of debar has no more room to decline unless billet price drops. Last year's average price of debar at same time was USD 427/mt, while the average price reached USD 377/mt ex-work including 9% VAT ex-work including 9% VAT at the end of last week. This means that despite all the available factors which pushed cost price to increase, its price is 12% lower than this time last year.

Flat Products

HRC 2 mm thickness was USD 505/mt ex-work Isfahan and USD 481/mt ex-work Ahwaz by beginning of last week. By the end of the week, the price of this product in Isfahan reached USD 500 /mt ex-work including 9% VAT, but it did not change in Ahwaz. Mobarakeh Steel co price in Isfahan decline as its base offered prices at IME decrease too. But for Ahwaz market price was stable as its supply level for thickness 2 mm was limited.

HRC price has reached the bottom. For thickness 3-15 mm, Mobarakeh Steel co product price declined from USD 502/mt to USD 499/mt ex-work including 9% VAT last Wednesday. As HRC price at IME declined, some traders started offering at discounts, this trend will continue in coming days and may make prices more downward.

Oxin co HRP thicknesses 10 to 40mm were priced at an average of USD 483/mt on Saturday but reached USD 481/mt on Wednesday. This has a very limited profit margin for traders and therefore their incentive to order this product is not high. However, this is not the case for ST52 quality HRP because their supply is extremely limited.

Hormozgan Steel co slab will be offered in coming days, so price fluctuations seem likely.

CRC market was stable and the week's average price was USD 649/mt while demand was limited. Suppliers were resisting price declines, but on Wednesday the market saw prices drop by USD 1.8 /mt.

HDG market was stable and the average price did not change significantly from USD 722.5/mt on Saturday. Only by Wednesday the average price rose slightly to USD 725/mt ex-work including 9% VAT as price increased for some thicknesses.


CBI weekly average ex-rate for Steel Products (SANA): Rials 110.076 / 1USD

30 Sep, 2019


Iran Steel News Bulletin                                                              

Sep 30, 2019 15:37
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