Billet
Billet had a downward trend during last week in Iran domestic market
from USD 632/mt to USD620/mt ex-work including 9%VAT. The reason was stagnation of long products market,
which is rooted in market confusion and weak demand. Besides, IME market
pricing and the downward trend in export prices played a role in falling
prices.
Iranian export billet price decreased
from USD 585 -590/mt to USD 565 /mt FOB
Iranian ports.
Long Products
IME ( Iran Mercantile Exchange) pressure to reduce base price of billet
and rebar made market silent and rebar price declined from USD 698/mt to USD 694/mt.
This stopped market activity, which is the worst condition for production.
I-beam price was also downward from USD 676/mt to USD 670/mt by end
of the week due to lower demand level and downward base prices at IME.
Flat Products
Price of 2 mm thickness HRC ex-work Mobarakeh was USD 1091 /mt on last
Saturday, which reached USD 1057 /mt by Tuesday. Mobarakeh Steel co HRC did not
change significantly because the price has reached its bottom and traders are
losing money due to the severe recession in the market.
Oxin co HRC remained stable at around USD 1134/mt. Downward global
prices have discouraged traders from exporting, which is why buying interest is
scarce.
Kavian co HRP remained stable thanks to the mill’s market
management at around USD 1070/mt. But lack of demand won’t let its price remain
unchanged for ever.
CRC demand is very weak. Its price stayed at around USD 1279/mt. Mobarakeh
steel co supply has scared the market and sellers prefer maintain inventory
instead of selling goods.
HDG market remained quiet and changed from USD 1329/mt to USD 1319/mt.
Demand level was limited and HRC price declined, therefore HDG market was
depressed.
Iran slab export average price was unchanged at USD585/mt fob
Iranian ports during last week.
Weekly
Analysis:
The government has put pressure on the market from two sides. The first
is the increased supply and downward trend of base prices at IME. The second
step of the government is to control the market through the trading system. Downward
global prices supported the government policy, but on the other hand, demand is
extremely weak. In fact, authorities are facing with a market that is shrinking
and operating below its capacity. It is not difficult to knock down a tired and
sick opponent, but the results will not be beautiful. Billet price at IME goes
down but does not increase its demand level. Besides, production is left
without financial support while banks are lagging behind in lending.
Large volume of pellet is without customer and lower world prices have
destroyed export incentives. Sharp rise in gas cost has limited profit margins
of DRI producers. Billet producers as well as long product mills are left without
buyer.
If the government intends to reduce prices, It has been succeeded. If trying
to pave the way for export, it has been succeeded, although the volume of
exports depends on foreign demand. But in fact, the government is sacrificing
the main issue, which is production. With this process, mills will be stopped,
which results in a severe shortage of supply and an increase in prices. In less
than a month, with this trend, government will see an increase in debts of steel
sector, which in turn will lead to a decline in production and accumulation of
raw materials, especially iron ore pellets.
CBI
weekly average ex-rate for Steel Products (SANA): Rials 233,682 USD
06 Dec 2021
Iran
Steel News Bulletin
IFNAA.IR
IRSTEEL.COM