The Iranian steel market is currently experiencing a period of stagnation, primarily due to weak demand across various sectors. While some prices have stabilized, the overall outlook remains challenging for producers.
Billet: Billet price have remained stable, with extended payment terms helping to balance supply and demand.
Long Products
Rebar: A pullback in demand has led to rebar price decreases. Prices are at a floor, offering no profit for mills. Despite this, limited market demand prevents any price increases.
I-beam: Beam prices are being maintained through supply management, even with weak market demand.
Flat Products
HRC: Despite very low market demand, Mobarekeh Steel is actively managing its supply to maintain prices, which has halted the downward trend observed earlier in the week.
HRP: Even with minimal demand, suppliers are unable to lower prices further, contributing to overall price stability.
CRC: Reduced supply of certain thin thicknesses has led to CRC price increases, but no significant fluctuations have occurred.
HDG: Increased hot rolled coil price and a rising exchange rate have improved the pricing of HDG.
Weekly Analysis:
In the world market: The global market remains largely unchanged from previous weeks, though the outlook is less optimistic due to upcoming summer holidays. Recent statistics from China indicate a continued slump in the housing market. However, China's steel export policies remain highly active, with over 50 million tons exported last month. This trend is expected to continue due to strong government incentives for exports.
The short-term demand outlook is not positive, but a significant price drop is not anticipated either.
In the domestic market: Demand, both for domestic consumption and export, is very weak. Export offers for Iranian billet are in the range of $420-$430 per ton FOB. While billet prices saw a slight recovery this week, thanks to credit-based offerings, two main factors are preventing further price increases:
1. Commodity Exchange Policy Confusion: The Iran Mercantile Exchange (IME) is creating significant confusion with its policy-making for the steel and mineral markets. Instead of fostering a welcoming environment for buyers and sellers, the IME's prescriptive policies have completely detached exchange transactions from actual market conditions.
2. Lack of Demand Stimulation: The fundamental issue is a severe lack of demand. New methods are needed to stimulate both domestic and export demand.
The government could implement policies to aid the steel industry. One approach is to exempt state-owned units located near borders (like Hormozgan Steel, Khuzestan Steel, and Kaveh South Kish) from export regulations. This would boost exports, increase government revenue, and alleviate domestic oversupply. Another solution is to offer preferential exchange rates for steel exports, such as a 10% bonus for every dollar of steel exported—a common and proven policy worldwide.
The Iranian market also suffers from consumer market confusion. Despite the Supreme Leader's repeated calls for officials to pursue ongoing affairs, many are focusing on rhetoric about war and destroying enemies instead of economic development.
To overcome the current situation, the government should create a calm societal atmosphere and pursue housing construction plans, which would positively influence public sentiment.
Currently, steel inventories are empty. Long products and flat products mills are operating at minimal capacity, resulting in high break-even costs. This situation is unsustainable, as the steel industry cannot survive under these conditions.
CBI average ex-rate for Steel Products (SANA): Rials 690,227/ 1USD
21 July 2025
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM