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Iran steel Market Trend in Week 32

Billet

Iran billet market had a week of fluctuations and prices surged upward till middle of the week. Price of billet size 150 mm was up by Rials1300,000/mt to Rials 16,500,000/mt, then declined by Rials400,000/mt till end of the week with no one interested in buying.

In domestic market Khouzestan Steel sold its 150 mm billet at Rials 12,484,000/mt on Tuesday in IME which after 5%VAT would be Rials 13,100,000/mt. Next day, the same material was sold at Rials14,150,000/mt including 5% VAT, it means Rials 1,050,000 /mt rise just in a day. Yet there is no clear reason for such a surge in billet price.

During first 17 days of current Iranian month (22 Jul- 07 Aug), around 207 ,000 tones of billet have been imported to Iran, but during last Iranian month it was totally 314,000 tones. So such price rises is not logical at the moment as domestic rebar production has dropped and domestic billet supply has increased. The only reason behind such a rise is fluctuations in exchange market. As domestic billet price is rising but it is downward in global markets, so traders would be interested in importing in near future unless domestic prices drop.

 

Long products

At the beginning of last week Isfahan Steel Debar was transacted at Rials16,252,000/mt in IME when demand level was forth time more than supply level. After VAT and other costs this debar would be Rials 17,100,000/mt which shocked the market participants and made prices upward. Besides higher base price in IME, ex- rate increased to more than Rials21,500/USD, so market was blocked on Tuesday. By Tuesday afternoon prices started dropping and by end of the week debar price declined from Rials 20,000,000/mt to Rials 18,000,000/mt ex warehouses in Tehran. Buyers were not interested but traders worried about more declines tried to decrease inventory levels.

At the current situation long products market would be quiet in coming days , but debar price won''t drop to under Rials17,000,000/mt.

 

Flat products

Price of 2 mm HRC started week 32 by Rials600,000/mt rise to reach Rials16,900,000/mt on truck in Anzali including 5% VAT but declined by Rials 700,000/mt till end of the week. Other sizes of HRC had the same trend during last week, rising till Wednesday and then declining. The fluctuation in exchange market was the reason behind this situation.

It is expected that flat products demand will increase in the future as global prices are dropping and importing flats with ex-rate of Rials20,000/USD is affordable. Besides, Debar price has increased and in some sections, buying flats in spited of debar is a better choice. So when flat products demand rise, prices will be upward too.

CRC and HDG market were in the same situation during last week, rising till middle of the week and declining when offers increased and ex-rate started to drop till end of the week.

It should be noted that during last 3 Iranian months, flat products import level has dropped significantly and the only way for covering this decline in import level is more domestic supply level.

(Ex-rate:  Official: Rials 12,260/ USD,   Market: Rials 20,903/  USD)

Iran Steel Service Center

 

Aug 12, 2012 09:01
Number of visit : 678

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