Billet
Billet price dropped by around USD46/mt during last week in Iran. At the beginning of the week Billet size 150 mm was priced USD709-713/mt but nobody interested in buying. During last week of every month, market is so slow but sellers were not in a hurry to decline prices. By middle of the week situation changed and prices started weakening. Drops in billet price have three main factors including:
1- Exchange rate devaluation and continuation of this policy in coming weeks
2- Depressed long products market
3- USD20/mt decrease in import offers of billet
It’s notable that during week 25, billet size 150 mm was offered in import market up to USD685/mt cfr Anzali port.
Long products
As sections buyers in Iran market are waiting for more drops in prices, debar and I-beam were faced with up to USD28/mt decrease in prices. Market is so silent and shortage of demand is obvious.
Government is controlling exchange market strictly, so market participants expect sections prices to drop more. When exchange rate devalues more, billet price would decline and make sections prices decreasing.
Considerable difference between import offers and domestic prices, made debar import level so limited during first quarter of the current Iranian Year. Many construction projects have liquidity shortage and nobody can afford to by sections.
But transactions levels in IME have increased. During first quarter of last Iranian Year, 368,400 M/TNS of mixed parcel of debar and I-beam was transacted in IME and it was around 644,400 M/TNS during same period this year. During recent weeks supply level in IME has dropped significantly but low demand made market depressed. Market participants anticipate that sections market sentiment won’t improve in near future, but prices won’t drop more than USD19/mt.
Flat products
2 mm HRC price dropped by USD28/mt during last week in Iran and finished the week at around USD805/mt on truck in Anzali including 4% VAT. Low demand and Mobarake Steel supply level made market of HRC for 15 mm and higher thickness silent. Market sentiment was negative and nobody interested in buying, many traders which had bought flats in expectation of higher prices, tried to sell their inventory hopelessly. Kavian Steel and Oxin Steel flat products were downward too but limited supply made declines around USD16/mt.
Devalued exchange rate and lower offer price for Kazakhstan products, made CRC price drop by USD19/mt during week 25. HDG market trend was the same.
Despite depressed flat products market, many market participants expect prices to increase.
Government policy for freezing flat products prices has made HRC price lower than debar price and CRC is the same as debar price. But normally HRC price should be at least USD46/mt and CRC around USD92/mt higher than debar price in IME.
Some market participants expect flat products prices to increase by government in IME during this month. Last week around 11,000 MT of HRC was supplied in IME at USD692/mt but the deal was stopped.
Iran Steel Service Center