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Iran steel market Trend in Week 29th , 2020

Iran steel market Trend in Week 29th , 2020

Billet

Average price of billet was USD 521 /mt ex-work including 9% VAT on last Saturday, but the market was waiting for trading at IME on Tuesday. On Monday, with the hope of increasing price at IME, average market price reached USD 551/mt. On Tuesday, 109,000 tons of billet was offered at IME, for which 249,000 tons of demand was registered. All buyers were required to pay 50% of the amount in advance, while previously could enter the competition with just 10% down payment. Despite this new regulation, the entire product offer was sold.

Reasons for the increase in price of billet last week were:

1- Increasing base price at IME

2- Continuation of ex-rate upward trend

3- Canceling transactions in the last two weeks and creating anxiety in the market

4- Higher long products prices

Exchange rate and export demand would be two factors affecting market in coming days. Actually in the current situation, billet price has reached its maximum level and has crossed the export price limit, so market insiders are in a waiting state.

One view believes that price level of long products has reached its peak and cheap inventories are controlling the market. On the other hand, the amount of capital required to work in the steel market has become very high, which is not in line with its efficiency. Due to the low return on capital, prices are not likely to rise as in previous weeks, but the second view believes that there is a reason for the price increase due to the lack of DRI and scrap. The outcome of both looks depends on time. The fact is that the market needs one to two weeks to test itself.

Long Products

Average price of rebar on Saturday was USD 562 /mt ex-work including 9% VAT in Iran domestic market, which reached USD 601/mt by Wednesday. The whole market was waiting for billet trading on last Tuesday at IME. With the methods used in the Iran Mercantile exchange to pay 50% down payment, it gave the retail market a signal that the policy of supply restriction and control is still in place. Despite this limitation, 42768 tons of supply was faced with 72424 tons of demand at IME. At the same time with  IME supply, two mills offered their product below  USD 552/mt. This affected the retail market at the same time as IME trading.

I-beam market had an upward trend. The reason was lack of supply of size 14 from Esfahan Steel co and Size 16 from another market leader in Ahwaz. Therefore, the average price of I-beam size 16 and 18 in Esfahan, which was USD 686 /mt on Saturday, reached USD 728/mt ex-work including VAT by last Wednesday.

Flat Products

HRC 2 mm thickness started the week with price of USD 828/mt ex-work Esfahan including 9% VAT and in Ahwaz it was USD 778 /mt, which until Wednesday it reached USD 971/mt in Esfahan and USD 883/mt ex-work Ahwaz. Mobarakeh Steel co HRC thickness 4-15 mm also rose from USD751/mt ex-work Esfahan to USD825/mt by end of the week.

Oxin Co HRP thickness 10 to 40 mm were priced at USD 807 /mt on last Saturday, but increased to USD 895 /mt by Wednesday. Kavian Co HRP had a more regular supply. The average price of its 12 to 25 mm thickness HRP on Saturday was USD 704 /mt, which reached USD 775 /mt by Wednesday. As mentioned in last week's reports, it is still possible for sheet prices to rise because it is rooted in slab price trend.

CRC thickness 0.40 to 2.5 mm was priced at USD 1139 /mt on last Saturday, which increased to USD 1250 /mt ex-work including VAT by Wednesday. With the increase in the price of HRC, HDG market also faced an increase in price, and from USD 1109 /mt on Saturday for thicknesses of 0.50 to 1.5 mm rose  to USD 1258 /mt on Wednesday, Higher exchange rate was also effective.

CBI weekly average ex-rate for Steel Products (SANA): Rials 181.205 / 1USD

20  July 2020

https://www.irsteel.com

https://www.ifnaa.ir  

Jul 20, 2020 14:56
Number of visit : 90

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