Iran Steel Market Trend in Week 40th , 2015

Billet

Billet size 150 mm started week 40^th at around Rials11.5 million/mt on truck in Anzali including 9% VAT. Market leader Khouzestan Steel Co was not offering much during first half of the week, therefore other small private mills were offering higher than Rials11.7 million/mt . By end of the week Khouzestan co billet was available at Rials11.5million/mt ex-work, still without any buyer.

Billet size 125 mm was available at Rials11.3-11.5million/mt but limited deals finalized.

Billet price is somehow dependent on long products prices, but was not following its downward trend. The reason was that supply level from market leader Khouzestan Steel Co was limited and also because demand was scarce. If billet price decline, demand level won’t improve. It may drop by around Rials500,000/mt but market participants believe it has reached the bottom and mills would lose more if reduce prices.

Long products

Long products have been downward currently in Iran. Last week also debar price reduced by Rials200,000/mt . By end of the week there was a rumor in the market about possible Rials200,000 /mt decline in debar price for one of market leaders. It will affect other mills’ pricing policy in coming days. Some market participants believe if this continues, debar price will be lower than Rials12.9/mt ex-works including 9% VAT.

This downward view believe demand is scarce and cost price for producing debar is Rials12.7 million/mt . Converting billet to debar costs Rials1.2million/mt, but some small mills are ready to get Rials800,000/mt for converting. Converting cost in global markets is around USD20-25/mt which would be near Rials800,000/mt. Therefore after sanctions, Iranian exporters may increase their work.

Angle and channel also were downward by Rials300,000/mt. Some offers were available in the middle of the week with Rials200,000/mt improvement but generally market was downward.

Flat products

HRC 2 mm thickness was almost stable at Rials15.2 million/mt on truck in Anzali including VAT during last week in Iran. Ex-rate was upward but HRC import price didn’t change. Chinese HRC was USD330-340/mt and Russian material was USD340/mt cfr Iranian ports. Last month import level was high, therefore prices didn’t improve after ex-rate increased. Global prices are downward and Iranian buyers would look for lower prices.

For thickness 2.5-6 mm prices were stable during last week as supply and demand are both limited. For thickness 6-15 mm, prices were down by Rials100,000/mt . HRP thickness higher than 15 mm was also down by Rials300,000/mt as Kavian and Oxin co were offering in the market. Their HRP price is expected to reach Rials17 million for Oxin and Rials16 million/mt for Kavian co in near future. Generally, global HRC price is downward and will make Iran market also down.

CRC market was stable by beginning of the week but by Monday after 3 importers offered many of their cargoes in Anzali, CRC market was shocked and started declining as some sizes were down by Rials1 million/mt. This trend will continue in coming days but downward level will be limited.

HDG price declined around Rials300,000/mt and will follow CRC downward trend in coming days.