Billet: Due to the decrease in the exchange rate, billet demand decreased, and its price became downward in Iran domestic market.
Long Products
Rebar: The retreat of demand due to the psychological atmosphere resulting from Iran- US negotiations lowered rebar price.
I-beam: Despite market-making efforts, fear of price reduction lowered demand and price of I-beams.
Flat Products
HRC: Silence of demand caused HRC supply to increase, and its price became downward.
HRP: Like other items, suppliers of Oxin co HRP were willing to sell, and lowered the prices.
CRC: The decrease in demand and market fear lowered CRC price.
HDG: The decrease in the price HRC and lower demand caused HDG price to fall.
Weekly Analysis:
In the world market: Global markets are severely disrupted, stemming from two factors: firstly, the impact of Trump's tariffs, and secondly, the global oil slump, which, though less influenced by Trump's policies, has faced a price drop, falling below USD70/Barrel. This is happening while billet price has also reached the floor, and any further decrease would effectively halt production in many mills. The global market outlook shows no significant signs of better demand in near future. Recovery from this situation depends on many factors, the most important being the issue of US policies and the resolution of the Iran and Gaza situations. Iron ore price remained almost stable with minor fluctuations, supported by Rio Tinto's production cuts. In the Chinese domestic market, billet price reached USD 415 /mt ex-works, and scrap price fell by USD10 to USD 347/mt CFR Turkey. If the market is not further disrupted by tariffs, the price trend will likely continue in this manner until the end of this week.
In the domestic market: The Iranian market is in shock due to the Iran-US negotiations. Unfortunately, there is no official outlook or analysis on the economic situation after the lifting or non-lifting of sanctions. If sanctions are lifted, the public expects a decrease in the exchange rate and prices. However, regardless of sanctions issue, other problems cause inflation in Iran, the result of which is an increase in the exchange rate. The most significant of these is the budget deficit. Apart from the budget deficit, there's the issue of bonds that the government must decide on, and more importantly, the energy imbalance that will lower production.
In the steel market, nothing significant has happened. Billet price in domestic market is roughly equivalent to the export price multiplied by the exchange rate of the official exchange market, not the free market rate. The negotiation discussions have also removed the price bubble in the product. Therefore, a significant price drop in steel is not anticipated.
This theory assumes the stability of the current conditions. Power outages will disrupt the entire chain. Additionally, the cost of production has increased by about 20% compared to last year, depending on the production method. Therefore, domestic market does not have much room for decline, even if the exchange rate drop more.
The only factor that will affect the steel market in the short term is the fear of demand and its retreat. We are witnessing that steel producers, due to the lack of sales of their goods, are turning to selling raw materials. In the coming weeks, this issue will be more seriously seen in slabs, but the continuation of this depends on maintaining the production level. Power cuts will affect production of semi-finished steel more than anything else, and this will reduce its supply.
CBI average ex-rate for Steel Products (SANA): Rials 688,423/ 1USD
21 April 2025
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM