Billet price has been declining over
the past week in Iran. Its average price on last Saturday was USD 381/mt, which
reached USD 372/mt ex-work including 9% VAT by Wednesday. Downward trend of
billet was due to two main factors:
The first factor is the stagnation of
demand in long products market and the second factor is the government's
insistence on controlling billet and long products prices at IME (Iran
The downward trend in billet price has
caused DRI price to fall to USD 191-199/mt. Since billet is the most key commodity
in steel market, it is very important for the government to pay attention to
its price. It is trying to control inflation, which is why it does not allow billet
base price at IME to exceed USD 319/mt. Controlling rebar price at IME at
maximum of USD 369/mt and I- beam at max of USD 383/mt is also based on the
same policy, but the current situation is subject to the conditions of the
global markets too. Falling oil prices will lead to a very serious economic
problem if global steel demand and prices decline.
Generally, it should be noted that billet
price at IME is at the bottom and there is significant gap with retail market
prices. Therefore, current situation won’t be sustainable.
Last Saturday average price of rebar was USD 445/mt, which
reached USD 436/mt by Wednesday. Average price of I-beam size 14 to 18 in
Isfahan was USD 520/mt , which reached USD 500 /mt including VAT by Wednesday.
The main reason for the decrease in prices is the control of prices at IME and
forcing all mills to supply their rebar at up to the maximum price set by IME. Traditional
lack of demand in Holy Month of Ramadan has also made market more quiet.
HRC thickness 2 mm was USD 561/mt on last Saturday, which reached
around USD 568 /mt by the end of the week. HRC thickness of 3 to 15 mm were
priced at an average of USD 645 /mt on Saturday, which reached USD 627/mt on
Oxin co HRP price dropped from USD 749/mt to USD 727/mt by end of the
week. Supply level of the mill didn’t change but demand level declined more and
made prices downward.
On last Saturday, CRC thickness 0.40 to 2.5 mm was USD 941/mt, which
increased to USD 968/mt by Wednesday. The relative improvement in the price of
this commodity at IME is due to the limited supply, not the improvement in
demand, because its demand remains in shortage, especially in the home
HDG price decreased from the average of USD 908/mt to USD 906/mt
during last week in Iran due to lower HRC price.
CBI weekly average ex-rate for Steel Products
(SANA): Rials 140.901 / 1USD
04 May 2020