Iran steel market Trend in Week 05th, 2020

Iran steel market Trend in Week 05th, 2020


Billet price was up last week in Iran. Average price of sizes 125 and 150 mm was USD 386/mt ex-work including 9% VAT on Saturday, which reached USD 392/mt by Monday last week. Trading on Tuesday was also sporadic due to Wednesday's market closure for Mourning Holiday. Reasons behind the increase in billet price were higher exchange rate and the severe DRI supply restriction. DRI production is facing with problems due to rainfalls and this has made the limited supply of pellets tighter. The limited supply of DRI has stopped some billet mills from producing. The latest base price of DRI has been heard about USD 226/mt but deals are very limited as it has a significant gap with billet sale price.

There are two views about billet price trend:

The first view believes that billet price trend will be downward as we have seen in the past two weeks that billet producers were not able to achieve enough sales in the same way as they did a month ago and at base price of around USD 386/mt would have slower sales as price difference of rebar with billet is not attractive for re-rollers. Besides, the liquidity pressure to buy billet for re-rollers has increased severely. DRI quota can lead to lower billet price as DRI buyers would be obliged to offer their billet production at IME (Iran Mercantile Exchange). An increase in billet supply at IME will definitely lead to a decrease in its price.

 The second view thinks that with the heard rumors about free trading at IME, we would see a price increase again, as activation of billet empty capacities means more demand for DRI and an increase in its price and will definitely make billet price higher.

Besides, another issue that is currently hidden and will reveal in the next couple of weeks is the impact of the Coronavirus on steel deals. This has had serious pressure on global stock markets, which has led to lower iron ore and billet price. On the other hand, the downward trend in scrap price will affect the export price of billet as it has declined by about 4% in the past 10 days.  If Iranian billet exporters face with lower demand level due to Coronavirus, their domestic supply level would rise.

Long Products

Average price of rebar was USD 419 /mt on last Saturday, and reached USD 432/mt by Tuesday mainly due to higher billet price and its limited supply level. The purchasing power of re-rollers has been limited as a result of higher billet price. Therefore, their production level has declined except for mills capable of trading on IME.  However, the last price of Khuzestan steel co billet price at IME reached above USD 394 /mt, which is not far from rebar cost price.

The average price of I-beam sizes 14-18 which was USD 513 /mt ex-work Esfahan on Saturday, rose till Monday but dropped to USD 511 /mt on Tuesday. Some market insiders believe I-beam price has no more space to improve due to the volume has been sold at IME during last two months.

Flat Products

Last Saturday HRC thickness 2 mm was USD 512/mt ex-work Esfahan and USD 579/mt in Ahwaz which reached USD 599/mt in Isfahan and USD 562/mt in Ahwaz over the weekend.

The average price of 3 to 15 mm thickness HRC from Mobarakeh Steel co which was USD 653/mt on Saturday, reached USD 668/mt by last Tuesday. Many traders prefer staying away from this market due to the risks available.

Oxin co HRP thickness 10 to 40 mm on Saturday was at USD 645 /mt, which reached USD 667 /mt on Tuesday, as a result of severe supply constraints. This trend has made traders too much cautious.  

CRC market passed last Saturday and Sunday waiting for Mobarakeh Steel co offers. On Monday some offers were available in the market. Average price was USD 863/mt last Monday, which reached USD 869 /mt by Tuesday. This trend is not attractive for CRC consumers and they buy just to satisfy their immediate needs.

HDG thickness 0.40 to 1.5 mm was USD 783/mt by beginning of the week, then reached USD 802/mt ex-work including 9% VAT on Tuesday. The increase in HDG price was more affected by the increase in the price of HRC and also higher ex-rate which influenced zinc price.


CBI weekly average ex-rate for Steel Products (SANA): Rials 121.782 / 1USD

03 Feb 2020

Feb 3, 2020 14:26
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