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Iran steel market Trend in Week 05th , 2019

Billet

Last week, billet market reacted to the price squeezes caused by the wrong policies. With the start of exports in January, supply of billet dropped sharply in domestic market. Cold weather and low margins, made billet production level drop. From the end of the month, billet shortage was very clear. This made billet production not economical as efficiency rate declined. Export contracts of previous month helped market sentiment as base price of Khouzestan Steel co billet rose from USD 330 /mt to USD 377/mt ex-work excluding 9% VAT. Supply level was 30,000 tones but demand was around 146,000 tones.

As billet price rose, DRI price improved from base price of USD 143-145/mt to USD 153 /mt ex-work excluding VAT. Some market participants expect billet reach peak at USD 435.5 /mt including 9% VAT. Then upward trend will stop.

The fact is that majority of debar producers will have high demand in coming days and billet market would be active. Higher billet price has made debar market active with its cost price higher than USD 458/mt ex-work including 9% VAT. But next week market would be almost close due to public and religious Holidays.

 

Long products

Long products were on the upside trend from Saturday to Tuesday last week, but on Wednesday, with a sharp rise in billet price, debar price suddenly rose. Average price on Saturday, was USD 420/mt, it reached USD 441/mt by Tuesday, then by Wednesday became USD 461/mt ex-work including 9% VAT. Reasons behind this sudden rise were:

1-Limitation of billet supply

2- Higher Export during January

3-Improved exchange rate

4-Market expectations for higher prices

With a sharp rise in debar price, market was stopped, which was a natural reaction.

Esfahan Steel co sold debar and I-beam at average base price of USD 392/mt at IME. But around ten days ago it was sold at USD 369/mt with delivery till first week of March. Construction projects are minimized and practically consumption is low.

Esfahan Steel Co will have to supply many products in coming days, possibly with higher prices.

 

Flat products

HRC 2 mm thickness rose from USD 550/mt ex-work Esfahan to USD 584 /mt till last Wednesday.  Ahwaz Rolling and Pipe co product which was not in the market till last Tuesday, rose from USD 539/mt to USD 573/mt ex-work including 9% VAT till end of the week. Price for thicknesses 3-15 mm increased by around USD 18/mt to end the week at USD 541/mt ex-work including 9% VAT.

Limited supply level and market expectations made prices improve. But after next week’s holidays, last purchases of Mobarakeh Steel co products will be in the market and participants are waiting for direction.

HRP thickness 15 mm or higher was also upward, due to limited supply of thickness 25  mm or higher which has put market in trouble. It is said that supply of these products will increase in coming days, in which case its price will Decrease. Average price rose from USD 470/mt to USD 497 /mt ex-work including 9% VAT.

CRC market experienced a steady but rising market. Average price of CRC thicknesses 0.40 to 2.5 mm, which was USD 713/mt last Saturday, reached USD 724/mt by Wednesday.

HDG market was quiet and inactive and there was almost no change in prices. Perhaps any change in price of flat products at IME indicates a recovery in price of HDG.

 

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CBI weekly average ex-rate for Steel Products (SANA):  Rials 87,254/ 1USD

04 Feb, 2019

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Iran Steel News Bulletin

 

Feb 4, 2019 15:03
Number of visit : 867

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