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Iran steel market Trend in Week 16th , 2020

Iran steel market Trend in Week 16th , 2020

Billet

On Sunday last week, average price of billet sizes 125 and 150 mm was USD 327/mt, which reached USD 322 /mt ex-work including 9% VAT by Wednesday. In some places, it was heard below USD 317/mt. There were several reasons for the decline in billet price:

1- Government authorities are trying to control billet price at IME ( Iran Mercantile Exchange) and doesn’t let its base price drop to lower than USD 291/mt ex-work excluding VAT. But lower prices have made production lower and after market activities improve, prices may become upward.

2- The second factor in lowering the price of billet is lower export volume and export prices. Iranian billet export price FOB Iranian ports has dropped from USD 390/mt to USD340/mt, which means a decrease of about 14%. More importantly, the volume of exports has dropped sharply and has practically stopped. If global billet demand does not improve over the next month, the existing billet inventories will flow into the domestic market, which will intensify sales competition.

3- Lower long products export level due to the closure of borders has reduced demand for billet in domestic market. Until there is no change in the export level of long products, there will be competition in the billet market which will lower prices.

Long Products

Average price of rebar on Saturday last week was USD 399/mt ex-work including 9% VAT, which was reduced to USD 378/mt ex-work including 9% VAT by Wednesday. Most market participants expect this trend to continue for the following reasons:

1- Controlling billet price at IME, at base price of around USD 291/mt, which means maximum price of rebar in the market would be USD 356/mt including VAT. Therefore, downward trend of rebar is expected to continue in retail market.

2- Reduction of export due to closure of destination markets, so sales competition will continue until export markets be open.

3. Liquidity shortage of rebar producers especially those active in export market before which have not been able to return the currency due to closure of foreign markets, is another factor leading to competition.

4. Anti-inflationary market expectations; Iran steel market has not become officially active yet, but most market insiders are looking to avoid buying because they expect prices to fall. Withdrawal of demand and preference for keeping liquidity will lead to lower prices.

Average price of I-beam sizes 14 to 18 in Isfahan on Saturday was USD 447/mt, which dropped to USD 421/mt by last Wednesday. The most important factor in lowering the price of I- beam, apart from the issue of exports and factors mentioned above, is stricter anti-inflationary expectations of the market.

Flat Products

HRC 2 mm thickness was USD 566/mt ex-work Isfahan including VAT by last Saturday, which was heard up to USD 472/mt by Wednesday. Price of thickness of 3 to 15 mm declined from USD 670/mt to USD 552/mt. The last price of HRC class B sold at IME by last Iranian year was USD 378/mt, while this year it has dropped to USD 338/mt excluding VAT. Oxin Co HRP thickness 10 to 40 mm was priced at USD 690/mt on Saturday, but dropped to USD 648/mt by end of the week, while lower offers were also heard in retail market. Reasons behind lower flat products were also discussed in billet and long products sections, but one point about flat products should be added which is lower global slab price. Last year, Mobarakeh Steel co exported a large volume of its slab, but this year, due to the closure of foreign markets, slab demand is still declining.

Price of CRC thickness 0.50 to 2.5 mm declined during last week in Iran domestic market from USD 878/mt to USD 829/mt. There is a wide gap between CRC price of last year at IME with delivery of next month at USD 546/mt and current market price, therefore, due to lack of demand and especial situation of consumer markets due to coronavirus spread, downward trend of prices should continue.  

HDG was priced at USD 858/mt on last Saturday, but dropped to USD 819/mt by end of the week. Lower HRC price was the main reason for this decline in HDG price, which is expected to continue.

CBI weekly average ex-rate for Steel Products (SANA): Rials 154.497 / 1USD

20 Apr 2020

Apr 20, 2020 13:05
Number of visit : 865

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