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Iran Steel Market Trend in Week 16th 2015

Billet

Billet market was downward marginally during last week in Iran. Billet size 125 mm was offered at Rials13.6 million/mt on truck in Anzali including 9% VAT in import market which declined to Rials13.45 million/mt by end of the week. Domestic production billet size 150 mm was offered at Rials13.4-13.5 million/mt ex-work including 9% VAT, but dropped around Rials 100,000/mt during the week.

Import offers are around USD360/mt cfr Northern Iranian ports. Importers can’t purchase billet with Exchange Room currency allocation at the moment, but there are still orders in the market ( with exchange room currency allocation) which have not arrived yet. Therefore, downward trend in Iran billet market would continue in coming 2 months. Importing billet with free market currency rate would cost not less than Rials13.8 million/mt including custom costs and VAT. Though, import rate has reduced significantly, but prices have not improved due to:

1- Harsh consumption decline

2- Higher domestic production during last 2 years

Long products consummation level has dropped significantly, therefore big producers like Esfahan Steel Co, are offering their billet in domestic market despite using for steel production. Some part of Esfahan Steel Mill available billet in the market has been supplied as barter deal for iron ore or other products. Though, many offers are not belonging to steel traders. They offer at cheap prices and have made market downward trend faster.

 

Long products

Long products were down during last week in Iran by up to Rials200,000/mt. Some sizes of debar experienced a stable week. Angle and channel were down by around Rials200,000/mt. I-beam price was also down. By Sunday, Esfahan Steel Mill sold 150,000mt of its I-beam size 14mm and 100,000 mt of its size 16 mm at base price of Rials14.5 million/mt at IME (excluding VAT) which was near retail market prices. This deal shocked market participants at first. But when details became clear, they were again back and prices started declining.

Main problem in long products market is demand level at the moment. Export demand is also low and market is under heavy pressure. Many mills have cut production , but yet market is oversupplied. Meanwhile lower prices would not improve demand as buyers are staying back worried about more declines in prices.

 

Flat products

Hot rolled coil 2 mm thickness started the week at Rials16.8 million/mt on truck in Anzali including 9% VAT. By middle of the week ex-rate increased and sellers tried to rise prices. But market persisted against any rise and finished the week at Rials16.3 million/mt. HRC 2 mm thickness was offered at Rials16.3/mt on truck in Imam Khomeini port at beginning of the week, which finished the week at Rials300,000/mt lower.

HRC thickness 3-5 mm from Mobarakeh Steel Co was stable in prices. Demand is low but supply level is also being controlled by the market leader. Sizes 8-15 mm experienced around Rials100,000/mt decline despite low supply. HRP market was also stable during last week in Iran.

CRC market was under pressure due to high supply level at Northern and Southern ports, price of thickness higher than 0.70 mm dropped significantly. CRC price has declined currently by Rials200,000/mt from pick of Rials25 million/mt on truck including VAT in Anzali port, but downward trend has not finished yet. As a result, many traders have stopped importing.

Imported CRC offer is around USD540/mt cfr Northern ports which should be purchased with free market currency rate. Final cost price for importing CRC would be at least  Rials22million/mt including custom duty and 9% VAT. Many market participants expect downward trend of CRC disappear in near future. But there are still parcels in the market bought with exchange room currency allocation ( which cost cheaper), therefore it would last around 2 months till prices became stable and real.

HDG market was silent during last week and prices dropped by Rials300,000/mt.

 

Ex-rate:
In Exchange Room: Rials 28,255 /1USD       
In free market: Rials 33,340 /1USD 
Iran steel service center

Apr 19, 2015 09:54
Number of visit : 968

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