increased during last week in Iran because market mentality was that prices have
reached the bottom. Average price increased from USD 640/mt to USD 651/mt
ex-work including VAT. As power cuts in near future is possible, more supply of
long-term sales by mills at IME has increased purchase volume.
Rebar price also
went up. The market thought that its price has reached the bottom, so traders tried
filling up warehouses. Rebar was changed from USD 722/mt to USD 725/mt.
I-beam price increased
from USD 664/mt to USD 674/mt as the market believed that it should go up.
HRC price was downward,
but rose slightly over the weekend. Market is still confused and does not know
what the price trend will be. Two mm thickness HRC ex-work Mobarakeh was USD 983
/mt on Saturday, which reached USD 991 /mt by end of the week.
Oxin co HRP had a
slow downward trend. Its price has reached the bottom, which is why traders are
not willing to sell.
CRC market was
quiet. Only reacted slightly over the weekend with a rise in ex-rate from USD 1184/mt
to USD 1199/mt ex-work including VAT.
HDG market was quiet
and over the weekend, despite higher ex-ate, it decreased slightly from USD 1185/mt
to USD 1181/mt.
the market continue to show strength.
1. Continued lock-downs
in China has severely limited demand, so prices around the world are either unchanged
or downward like slab.
war has led to competitive Russian goods become available in many markets.
These goods with low prices in the absence of Chinese demand have caused a drop
in global prices especially in scrap, billet and slab market. These are the
three main steel related raw materials in the China market. If China market
remains closed, prices will not have much room to fall as prices have reached near
levels before the Russia invasion of Ukraine.
3- Oil price has not
changed significantly so steel cost prices does not have much room to decrease.
Raising interest rates in the United States is just an attempt to stabilize
prices or perhaps slow down inflation rate.
4- There are two
influential factors in the domestic market. The first is the general atmosphere
of the market, which participants have stopped buying with the beginning of downward
trend in prices and now they think prices have reached the bottom. Secondly downward
prices would virtually eliminate the issue of export tariffs. Therefore, export
level will improve.
5- The determining
factor in the coming days is the issue of power cuts and its impact on
production, which will make prices upward.
The price gap
between DRI, scrap and billet price is very limited compared to March prices.
In fact, there is little room for further price reduction. If power cuts issue
is serious, prices will rise rapidly.
The last point is
that the policy of depositing huge volumes of subsidies in a short time has
increased the speed of money circulation. On the other hand, eliminating
subsidies and unifying the currency rate in the face of budget deficit with
inflation is a very heroic risk that the government has accepted. Continuation
of these conditions will increase the inflation rate, which will inevitably
affect the steel market.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 248,302 / 1USD
16 May 2022
Iran Steel News Bulletin