Billet: The price of steel billet remained stable due to a balance of low demand and limited supply. However, prices showed a slight weakness toward the end of the week, likely influenced by holidays and market closures.
Long Products
Rebar: Despite a decrease in production, which limited the supply of rebar, its price wasn't significantly impacted because of the overall weak demand.
I-beam: Similarly, I-beam prices saw no real change; market makers simply manipulated the prices.
Flat Products
HRC: The Mobarakeh Steel Company's market-making activities successfully improved HRC prices.
HRP: The HRP market overall remained stable, as neither price increases nor decreases were feasible.
CRC: CRC supply level is limited, but with no corresponding demand, the market has remained flat.
HDG: Even with an increase in the price of HRC, weak demand prevented any actual HDG price change, keeping them stable.
Weekly Analysis:
In the world market: Oil prices are holding steady at USD68/barrel, while iron ore has dropped to around USD100 per ton. Scrap prices are stable at USD347 /mt CFR Turkish ports. As a result, billet prices have also remained flat, trading at USD430 FOB Black Sea ports. Slab prices are holding at USD420 FOB Black Sea, and HRC are priced at USD465 -485/mt FOB Black Sea.
Global markets are influenced by two key factors:
1. Oversupply: China's surplus exports continue to flood the market, and there's a potential return of Russian suppliers following a possible agreement with Ukraine. The world is now truly seeing the impact of China's "Belt and Road Initiative," although this depends on the sustained strength of the Chinese economy. A "Japanification" of China's economy would severely shake the global economy.
2. Weak Demand: Demand has declined in China and is also weak in other parts of the world due to the uncertainty created by Trump's tariffs. The market is currently in a state of "wait-and-see," and prices are not expected to change.
In the domestic market: In domestic market, Prices are a result of the interplay between supply and demand. In short, inflation is caused by:
• Changes to infrastructure.
• Increased costs.
• Increased demand.
• An increase in the money supply.
Over the last three months, the country's economic infrastructure has been severely damaged by widespread power outages. Production costs have risen due to decreased output and higher prices for labor, electricity, water, transportation, and real interest rates. Demand has fallen due to a recession. The money supply is increasing because of a budget deficit.
The money supply has grown significantly compared to last presidential administration, and an upward trend in inflation is expected to continue given the current conditions. However, "snapback" is also a possibility. The budget for current year shows a 42% share for taxes, 19% for oil, and 39% for bonds.
Snapback could lead to an increased monetary base, pressure on the banking system, and a higher exchange rate. Economists predict an inflation rate of at least 40%. The biggest consequence of a snapback would be banking issues that disrupt money transfers and, consequently, reduce exports. We'll have to wait to see the economic conditions once electricity supply stabilizes. In any case, a recession caused by low demand is unavoidable, with or without a snapback. The exchange rate, however, is not expected to fall.
Last week, the market experienced a shortage of pellets, but what was available was offered at a base price of 65,000 to 67,000 Rials per kilogram. DRI was well-received by buyers, thanks to long payment terms and low interest rates, even though the market price was 1,000 Rials per kilogram lower than the stock market average. The same trend was seen with Billet market. Despite limited supply from major player Khuzestan Steel, which was impacted by power shortages, over 50% of the billet was sold due to favorable credit payment terms.
Mobarakeh Steel company changed its base and premium prices for sheets, which drove up prices on the stock exchange. Rebar sold well due to credit based offerings, but the market price is about 15% lower than the cost of purchase on the stock exchange. The same is true for sheets, and this price gap between the stock and market prices is considered logical.
Due to power outages and production drops, steel producers should be offering higher prices on the stock exchange, but the regulated nature of the exchange prevents this. When productivity figures for steel companies are released at the end of September, it's expected that the stock exchange's resistance will break. However, since market prices are a function of supply and demand, and credit sales are being used as a financial tool, it is unlikely prices will rise in the market unless demand changes. In fact, production and supply are expected to increase in the latter half of September as power outages decrease. The Iranian economy is facing a period of recession with inflation.
CBI average ex-rate for Steel Products (SANA): Rials 692,591/ 1USD
25 Aug 2025
M.Chitsaz
Iran Steel News Bulletin
IFNAA.IR
IRSTEEL.COM