Billet price was upward during last week in
Iran domestic market from USD 610/mt to USD 632/mt ex-work including VAT, mainly
due to supply shortage in DRI segment and also higher ex-rate.
Higher billet price, upward currency rate and
inflationary expectations were the main reasons behind upward rebar price last
week from USD 675/mt to USD 691/mt ex-work including VAT by end of the week.
I-beam was also upward due to higher ex-rate
and supply control from USD 815/mt to USD 829/mt by end of the week.
Mobarakeh steel co HRC 2 mm thickness was USD 923/mt on Saturday, which reached USD 982 /mt ex-work by Wednesday. Limited supply
level, higher ex-rate, lack of slab supply at IME all made HRC market upward.
Oxin Co HRP was also up from USD 899/mt to USD
970/mt due to sme reasons.
HDG was also upward as followed HRC market and
upward ex-rate from USD 1171/mt to USD 1193/mt by end of the week.
Closure of foreign markets for New Year
Holiday has limited demand level. Besides, the
uncertain situation of covid related restrictions in China has caused the
markets to be cautious about the estimation of demand in China. Christmass and New
Year holiday has reduced steel demand to a minimum for now, but from next week,
when the markets open, China's demand will begin to fill the warehouses before
the Chinese New Year holiday, so the price trend will continue to rise.
in domestic market, three issues can be concerned:
First, supply side issues: as DRI supply has decreased, billet
supply has also taken a downward trend. Many mills,
especially induction furnace based, have kept the market from their inventory
not new production, but in the coming weeks, their stocks will also be emptied,
and only the big suppliers which are faced with 40% production cut will remain
in the market. This has caused the
market's sentiment to be positive towards price of finished product, and
traders have turned to the policy of maintaining inventory instead of
The second issue is exchange rate fluctuations
and budget deficit is the main reason for the increase in the exchange rate. Traditionally in last months of the year, the government tries
hard to cover this deficit, and how successful it is depends on many factors.
The third issue is the interest rate, which
has practically increased without an official announcement. This will put
additional pressure on producers.
The upcoming conditions for the steel market
indicate more stagnation and inflation, assuming a decrease in currency rate, steel
price will not decrease seriously, because the main problem of steel is from
the supply of raw materials, not from the exchange rate.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 285,008/ 1USD
02 Jan 2023
Iran Steel News Bulletin