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Iran Steel Market Trend in Week 19th , 2023

Iran Steel Market Trend in Week 19th  , 2023

Billet

Billet price went down due to lower global prices and the pressure of the government to reduce prices. On Wednesday, billet market looked for improvements as it participants were expecting higher DRI price in the next week, and sellers retreated from the market. Average billet price changed from USD 604/mt to USD 564/mt ex-work including VAT by end of the week.

 

Long Products

Rebar price was downward following government policies and the global trend of demand and prices. Most mills producing rebar are facing with inventory problems. According to the market, the price floor of rebar including value added tax is USD 603/mt, while some rumors talk about authorities intention to decline it to USD 550 /mt. Market average price during last week dropped from USD 730/mt to USD 695/mt ex-work including VAT.

I-beam had a downward trend, which was affected by the psychological atmosphere prevailing in the market. It was down from USD 856/mt to USD 834/mt by end of the week. On Tuesday, Isfahan Steel co prevented the fall by stopping shipment of goods.

 

Flat Products

HRC 2 mm thickness declined from USD 949/mt to USD 933/mt ex-work Mobarkeh by end of the week. The market had a downward trend due to lower ex-rate, downward global prices and market stagnation, but since Tuesday, when it became clear that Mobarakeh Steel co has stopped supply, prices slightly improved.

Oxin co supply stoppage has kept HRP market relatively stable. Price changed from USD 878/mt to USD 871/mt.

CRC average price dropped slightly from USD 1394/mt to USD 1385/mt as HRC market had a slow downward trend too.

HDG had a stable market and showed a very limited decline at the end of the week from USD 1363/mt to USD 1358/mt.

 

Weekly Analysis:

In world market:

Global markets are still in a downward trend, but it seems that prices have reached the bottom. China market trend determines billet and HRC price trend, which is currently quiet. On the other hand, Turkey market waiting for the election reduced scrap price to its minimum. As summer Holidays in world markets is near, markets usually fall and sty quiet in June and July, so there is not much hope for a price increase at the global level, and we have to wait, especially since oil price has started to decline as the weather warms up.

 

In domestic market:

Thanks to the wrong policies at Mercantile Exchange, market is so confused and can’t have any logical analysis for it.  Iran Mercantile Exchange is pushing billet price to return to below USD 524/mt excluding VAT. Lower global billet prices justifies this policy, but increaing DRI price at IME contradicts with the decrease in billet price, while pellet does not have a serious buyer in the domestic market, IME has increased its price by 5% for this week. On the other hand, production side is under pressure from two sides, the first is the liquidity aspect and the second one higher cost price. Power tariff is rising, while the possibility of power cuts is very strong from May 22nd  with industrial section to be the first victims.  

It seems that IME is trying to increase supply volume before power cuts begin and lower the base prices so that there would be enough inventory in warehouses during summer power cuts. But the market looks at other factors affecting the market which have increased market concers and mistrust in government policies.

Most of the steel market participants try to rely on the minimum inventory level and and lower their risk range while the market believes that prices have reached their bottom and are ready to return.

 

CBI average ex-rate for Steel Products (SANA): Rials 381,559/ 1USD

15 May 2023

M.Chitsaz

Iran Steel News Bulletin

IFNAA.IR

IRSTEEL.COM

 

May 15, 2023 14:55
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