Billet
Billet price peaked last week in Iran
steel market. Average price of sizes 125 and 150 mm improved from USD 457 /mt
ex-work including 9% VAT to USD 483 /mt
at the end of the week. Billet price has been upward due to following
reasons:
1- Continuous export
2-Increasing exchange rate
3- Some re rollers have
to buy billet for producing long products which has pre sold it before.
Many market insiders believe that billet
price will be downward over the week ahead.
Their reasons are:
A. Billet export level has declined and
will continue this trend. Besides, Chinese sellers are back and would take
Far-East market share.
B – Exchange market
C. Assuming the price of DRI at the base
of USD 174/mt, price of billet cannot exceed USD 395 /mt ex-work including 9%
VAT, so price of billet has at least USD 58/mt bubble. It should be noted that
from Tuesday price of DRI fell from USD 171/mt to USD 166/mt ex-work excluding
9% VAT, DRI supply level was also upward.
D – Long products manufacturers will fall
back after the downturn in coming days and demand for billet will decrease.
E. We have around up to 10 working days
till end of the year in Iran, so speculators will withdraw from the market and
billet market bubble will gradually dip.
Long Products
Long products prices were uptrend. Average price of debar
rose from USD 523/mt on Saturday to its peak on Tuesday, which recorded at USD 548/mt,
but since Wednesday supply increased and average price returned to USD 545/mt.
The reason for the sharp increase in prices was the competition for buying billet
from Khuzestan Steel co on Tuesday, with finished price close to USD 447/mt,
about 23% higher than first offered price. Actually billet price rose by USD 68/mt
compared to around a month ago and debar market took around USD 25/mt of this
rise for itself.
Statistics show that during last Iranian month more
than 260,000 tones of long products has been transacted at IME ( Iran
Mercantile Exchange). Esfahan Steel co debar sold before at USD 441/mt ex-work including 9% VAT is in the warehouses. Upward trend in at
I-beam and other long products market was not clear and many sellers stayed
back to watch market activity.
One thing should not be forgotten is that debar at USD 546/mt
is not attractive to export; of course, the price should drop.
Flat Products
Esfahan Steel co HRC 2 mm thickness rose
by USD 23/mt to USD 638 /mt ex-work including 9% VAT. Rolling and Pipe co
product was up by USD 6/mt to USD 592/mt ex-work including 9% VAT. Mobarakeh
Steel co product thickness 3-15 mm was faced with limited supply and
inflationary expectations, therefore, price was around USD 594/mt. This Iranian
year working days is finishing and demand will be downward.
Oxin co HRP was faced with a severe
supply shortage. Regardless of the management problems that the factory faces,
technical issues have been raised. USD 348/mt slabs are at the mill warehouses
in a large volume and are waiting for conversion. By Wednesday onward some
sizes were offered in the market and made upward trend quiet. With supply
improvement in coming days prices would be balanced.
CRC was upward. Demand is scarce but
higher offered price of Mobarakeh Steel co at IME made retail market price up. CRC
price at IME has rose from USD 594/mt at 04 Feb 19 to USD 617/mt by last
Monday.
HDG price was also upward during last
week in Iran just following other flat products trend in the market.
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CBI
weekly average ex-rate for Steel Products (SANA): Rials 86,134/ 1USD
25 Feb,
2019
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Iran
Steel News Bulletin