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Iran Steel market Trend in Week 51st , 2016

Billet

Billet market was downward during last week in Iran.  Billet size 125 mm started the week at USD367-372/mt ex-work including 9% VAT and finished it at USD 347/mt. Size 150 mm also dropped by USD15/mt to USD352/mt by end of the week. There were also some lower offers available in the market.

Significant decline in long products demand during last week was the main reason behind billet downward trend. Cold weather made long products demand lower. Besides, billet price had peaked and influenced demand level. Long products mills are waiting for a clear market trend and has stopped buying till balance come back. Its Christmas time and lower demand for Iranian billet export market would be inevitable which would affect Iran domestic market negatively.

 

Long Products

Long products were downward during week 51st in Iran. Debar diameter 14-25 mm declined by USD5/mt and finished the week at average price of USD441/mt ex-work Esfahan. Sizes 18-25 mm were available at around USD436/mt. Size 16 mm was USD458/mt ex-work including VAT, which made average price higher.

Average price of I-beam14, 16, 18 mm dropped by USD2/mt to reach USD476/mt ex-work including VAT. Sellers were ready for more discounts.

Downward trend continued during the week. Traders worried about more declines, were offering their cheap purchased inventories. Lack of demand made the situation worse. Market participants are asking about market future trend. Whether this downward trend continues and how much would be? One answer would be that till it reaches average price of available inventories at warehouses. If average purchased price of debar available at warehouses In Tehran would be USD397/mt, debar price would probably drop by USD25/mt within a month. But more downward trend may depend on future billet price which is unlikely to support more declines in long products market.

Market players mostly believe billet price won’t be lower than USD345/mt including VAT. Therefore, balance may come back to debar market within a month when cheap inventories finish.

 

 

Flat Products

HRC 2 mm thickness decreased by USD7/mt during last week and reached USD555/mt on truck in Anzali including VAT and custom duty. Sellers were eager to give more discounts. For sizes 2.5-10 mm, Mobarakeh Steel co prices were down by USD7/mt. Consumption level was low and Kavian and Oxin co prices were also down by USD7-12/mt.

Flat products downward trend has two main reasons:

1- Authorities announced that custom duty for flat products will declined from 20% to 10%. Though, average price of import cargoes would be down by around USD50/mt. This decline in duty would affect HRC 2 m thickness more as market is dependent on its import. During last 9 months of current Iranian year 900,000 mt HRC 2 mm has been imported. With custom duty halved, its price would reach USD496-520/mt on truck in Anzali including VAT and custom duty.

2- The other reason behind flat products downward trend is lack of demand. Supply level is low but current market inventory seems enough.

It’s noteworthy that 2 factors are supporting market against harsh declines, including lower supply level and fluctuations of ex-rate.

CRC market was downward in Iran. Average price of CRC thickness 0.70-1.5 mm dropped from USD674/mt to USD662/mt on truck in Anzali including VAT and custom duties. As custom duty for CRC has halved, downward trend would continue.

 Current CRC inventories at Anzali warehouses include average purchased price of USD450-460/mt cfr Anzali, ex-rate of Rials36500-36700/1USD and custom duty of USD99/mt. It means USD520/mt on truck in Anzali including custom duty and VAT. But for new purchases, importers should pay for USD520-530/mt cfr Anzali, with ex-rate of Rials39000-40000/1 USD and custom duty of USD49.5/mt. Then finished cost price would be USD565/mt on truck in Anzali including custom duty and VAT. Domestic market is downward, therefore importers would move cautiously.

CRC market would continue downward trend but slightly as market inventory level is low.

 HDG market was unchanged despite limited supply level for some sizes as the market is quiet.

 

 

Ex-rate:
In open market:  Rials 40.350 /1USD

25 Dec 2016

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Iran Steel Service Center

IFNAA News Agency

http://www.ifnaa.ir/en/home

Dec 25, 2016 11:04
Number of visit : 985

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