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Iran Steel Market Trend in Week 09th , 2023

Iran Steel Market Trend in Week 09th  , 2023


Due to lower currency rate and higher supply level, inflationary expectations retreated and this caused billet price In domestic steel market decline from USD 933/mt to USD 814/mt ex-work including VAT.


Long Products

Lower ex-rate made rebar price downward from USD 1036/mt to USD 985/mt ex-work including VAT.

Despite the general decline in steel prices, Esfahan Steel co market management along with talks of halting its production early next year helped boost demand for I-beam. Its average market price changed from USD 1386/mt to USD 1468/mt.


Flat Products

Price of 2 mm thickness HRC ex-work Mobarakeh was USD 1509 /mt on last Saturday, which reached USD 1403 /mt by Wednesday. The talks about the price of steel export currency, along with lower ex-rate, worried many traders and caused an increase in the supply of Mobarakeh steel co flat products but significant decline in prices is unlikely.

Lower ex-rate made HRP market quiet. Oxin co offered HRP at IME which may have been for the first time, at the base price of USD 1111 /mt with four-month delivery, gave the market a stable signal, while slab export market is active and there is no reason for reduction in price. Oxin co HRP average price in the market changed from USD 1281/mt to USD 1306/mt ex-work including VAT.

CRC market had a heavy bubble, part of which was discharged with drop in ex-rate. The announcement of the base price of CRC together with the stoppage of Mobarakeh Steel co production at the beginning of next year will not allow this product price to drop much. Its average market price improved from USD 2130/mt to USD 2146/mt.

Lower HRC price along with the decrease in ex-rate, which has a direct effect on Zinc price, caused  HDG market decline from USD 2125/mt to USD 2035/mt ex-work including VAT.


Weekly Analysis:

Global markets are active thanks to China and spring coming in Europe, which has strengthened Iran export market too. According to higher scrap demand in Turkey, the possibility of price reduction in the next two months is unlikely. This will activate Iran's export market from raw materials to finished steel products more, while the New Year Holiday ( which will began on 20th March)  will give mills more space for working in export market as they will be less involved in the issues and sensitivities of the domestic market.

In the domestic market, the government is very interested in lowering steel prices because it achieves several goals by that.

 First, it will lower the general rate of inflation.

 Second, as domestic market demand calms down, export market will be improved.

 Third, with the increase in exports and higher currency entrance from steel export, it would affect exchange rate more strobgly to control it.

Therefore, domestic demand should be reduced and the only way is to eliminate inflationary expectations and replace it with a downward outlook on the domestic market. The government would achieve this goal by increasing suply of DRI. DRI supply level can reach up to 200,000 tons per week. Therefore, with higher DRI supply and the downward trend of its price, billet producers will seek to sell their product even before buying DRI. This policy will accelerate the downward trend prices, especially rebar, which has many producers, the downward trend will be very fast and terrible.

Two factors may disrupt the above process including exchange rate fluctuations and cost price of products. If gas price goes up, it will have a direct and immediate effect on DRI price. This affects the entire steel production chain. Re-rollers also need gas to keep the furnaces warm. Therefore, the change in the cost price will directly affect the product price, even if the exchange rate is fixed. There is also an upcoming factor, and that is the possibility of power cuts from June. If this happens, DRI price will decrease but billet, slabs and finished products prices will increase.

Therefore, the steel market will not be encouraging in the coming weeks. But at the beginning of the next year, its fluctuation will be very intense, especially if the recent resolution of the parliament regarding the increase in the price of iron ore is approved in the next year's budget.


CBI weekly average ex-rate for Steel Products (SANA): Rials 285,000/ 1USD

06 March 2023


Iran Steel News Bulletin



Mar 6, 2023 14:07
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