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Iran steel market trend in week 41st , 2014

 

 

 

 

 

Billet

Billet market was almost stable during last week in Iran. Billet size 150 mm from import market was transacted at Rials 16.9 million/ mt on truck in Anzali including 8% VAT. Domestic origin billet size 120mm was around Rials16.2-16.3 million/mt ex-works including 8% VAT.

Esfahan Steel Co sold around 10,000 mt of its billet at base price of Rials15.55million/mt excluding 8% VAT. After that sold 30,000 mt billet with Rials150,000/mt discount. It's expected that Khouzestan Steel co will offer billet at base price of Rials 15.3 million/mt excluding 8% VAT in comming days.

Scrap inventory level is low at the moment in Iran market, so small billet producers using scrap as raw material cannot decline their prices, but as iron ore price is downward, mills such as Esfahan Steel Co and Khouzestan Steel Co which use DRI for producing billet, can reduce their prices.

 

Importing billet is not economical at the moment as ex-rate matter. Besides billet price in global markets is downward and is expected to drop more as iron ore price is declining and chinese copetitive billets will drop it to around USD450/mt fob black sea for CIS billet.

generally billet demand is low in Iran market and lower prices will lead to closure of many small producers as many mills are working at minimum capacity at the moment.

 

Long products

During last week long products prices were down by up to Rials200,000/mt in Iran domestic market as demand is low but billet price is almost stable. As production cost is high, re_rollers are not eager to supply much. There is no buyer and prices are downward.

Market is in a waiting situation, so despite prices at the bottom, nobody expect significant changes in near future.

By taking billet base price of Rials1.5 million/mt in to account, it would costs around Rials16.6million/mt ex-works for reroller afrter 8% VAT and Rials400,000/mt transportation rate

Therefore, debar producer would costs around Rials17.6 for producing a tone of debar. But at the moment debar  price is around Rials17.9-18.1 million/m ex-work in domestic market so it is totally unprofitable for the mill to produce debar.

 

Flat products

HRC 2 mm thickness was unchanged during last week in Iran at around base price of Rials2.06million/mt on truck in Anzali including 8% VAT.Korean product supply level at Southern ports was lower by last week. For sizes 2.5-8 mm supply level is low and import is much limited but prices are unchanged. For sizes

8-15 mm, higher import level from  Russia has declined prices by Rials100,000-200,000/mt except for size 12 mm whih is in low supply .HRP price also declined by Rials100,000-150,000/mt due to lack of demand.

CRC inventory level of domestic leader, Mobarakeh Steel Mill is yet scarce, some sizes have experienced very high rises as size 2.5 mm was transacted at Rials3.2 million/ mt including 8% VAT.

Low domesric supply has lead to higher import from South Korea and China. If domestic supply increase, market inventory level would rise and affect prices negatively.

HDG and PPGI market were almost stable. Demand is low and supply level limited, so market is quiet.

 

Ex-rate:

In exchange room: Rials 26,679/USD

In free market: Rials32,500 /USD

Iran Steel Service Center

 

 

 

 

 

Oct 12, 2014 09:49
Number of visit : 877

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