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Iran steel market Trend in Week 42nd, 2019

Iran steel market Trend in Week 42nd, 2019

Billet

Billet price remained almost flat last week. Average price on Saturday was USD 349/mt ex-work including 9% VAT, until Monday it reached USD 348/mt but improved from Tuesday to USD 350/mt. The main reason behind billet price stability is that the current price has no room for more decline. Long products market is also quiet and can’t help billet market sentiment. Besides, due to the religious Ceremony of Arba’een, trucks were not allowed in southern and western borders. All these factors have made billet market silent. This situation may continue this week till all pilgrims came back from Iraq.

Generally, market insiders expect lower billet price in coming future and believe that lower supply level at the moment has avoided prices from more declines. During last 2 months, billet price had been downward, therefore, producers have stayed back from domestic market as there is no balance between billet and finished products prices. At the moment exporters are under pressure to deliver cargoes which had been traded before at USD370-380 /mt fob for October delivery, therefore, they focus on export market not domestic market. New export offers are around USD340/mt fob which will reduce DRI and Pellet price too.

Long Products

Average price of debar, which was USD 391/mt on last Saturday, was down to USD 389/mt by the weekend. Debar price downward trend was due to suspension of export to Iraq and also to Turkey, which led to a relative decline in prices, but more declines seem no longer possible, so mills have reduced production volume and only sold some volumes to cover their liquidity needs.  Last Wednesday, a new export policy was announced, which states that steel export do not require any authorization, but there are some ambiguities which says such policies won’t work and state controls won’t response correctly.

What is important is the demand that the government should support it through export stimulus policies. Last week Turkey's clash with the Kurds began, putting pressure on the Turkish lira. This will have a serious impact on the export price of debar. But it will not reduce export level because "long products have to be exported or the mills must stop production". It is the government that must pave the way for export.

Last Saturday, average price of I-beam sizes 14- 18 in Esfahan was USD 444 /mt ex-work including VAT, which increased to USD 449/mt by Wednesday mainly due to limited supply level.

Flat Products

HRC 2 mm thickness started the week at USD 490.5/mt ex-work Isfahan and USD 476.5 /mt in Ahwaz on Saturday, but the price was down to USD 481 /mt in Isfahan and USD 462/mt in Ahwaz by end of the week.  New regulations about open export of Pipe and profile can help HRC market. HRC 3 to 5 mm thickness were in limited supply but their average price on Saturday was USD 503/mt , then reached USD 501/mt ex-work including 9% VAT. Sheet inventory has declined sharply and supply is constrained due to base price declines at IME and also lack of demand.

Oxin co HRP 10 to 40 mm thickness were traded at USD 494/mt on Saturday but fell to USD 492/mt on Wednesday despite lower availability of Oxin products, but transportation problem by trucks due to Arba’een was also a factor in demand. HRP quality ST52 supply constraint still remains and does not seems to be resolved in November because it is rooted in Khuzestan steel co slab shortage.

CRC price declined from USD 658/mt to USD 653/mt ex-work including 9% VAT.  CRC sale volume at IME had been upward from 4 months ago and its price has been downward.  With the silent demand on the other hand, prices would continue declining.

DHG price went down, falling from USD 712/mt to USD 701/mt.  Declining currency rate and falling price of HRC were two factors driving price down.

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CBI weekly average ex-rate for Steel Products (SANA): Rials 107.030 / 1USD

21 Oct, 2019

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Iran Steel News Bulletin

Oct 21, 2019 15:58
Number of visit : 68

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