Billet
Billet price rose as expected last week in Iran domestic
market from USD 387/mt to USD 410/mt ex-work including 9% VAT on Tuesday, but
fell on Wednesday, dropping to USD 403/mt. There were reasons behind this trend:
Firstly, ex-rate surged during the week and peaked on
Tuesday, but declined on Wednesday.
Second reason was inflation expectations, as the market was downward
during past six months and the average price of all sections and billet was
lower than its average price in the previous year, market was waiting for a
change. And upward ex-rate helped billet price up trend.
Third is the issue of restriction of supply of raw materials
that continues to exist. At present, all billet producers are allowed to export,
so their focus is not solely on the domestic market, which has resulted in
improved demand for DRI.
Long Products
Average price of rebar was USD 426/mt on
last Saturday, but reached USD 451 /mt ex-work
including 9% VAT on
Tuesday and dropped to USD 448/mt by Wednesday. Like billet market, rebar price
improved due to higher ex-rate. Also as billet price rose helped rebar price as
many billet suppliers stopped offering.
As the exchange rate declined, rebar
price went down too, as many traders having cheap purchased stocks started
offering to gain some profit from this upward trend. This made prices decline. Generally,
market needs around 2 weeks’ time to adjust itself with billet upward
trend.
Price of I-beam size 14- 18 improved
from USD 488/mt to USD 507 /mt by Tuesday, but fell USD 0.9 /mt on Wednesday.
Flat Products
HRC
2 mm thickness was traded at USD 544/mt ex-work Esfahan and USD 526 /mt ex-work
Ahwaz on Saturday and peaked to USD 585 /mt in Esfahan and USD 553/mt in Ahwaz
on Tuesday. But there were also cheaper offers in the market too and this made
the price on Wednesday in Isfahan USD 567/mt and in Ahwaz USD 544/mt ex-work including 9% VAT. 3 to 5 mm thickness HRC
were not supplied in Isfahan but thicknesses 6 to 15 mm were subjected to the
same process and increased from USD 582/mt on Saturday to USD 630/mt on Tuesday
but dropped again to USD 625/mt on Wednesday.
Oxin
co HRP thickness 10-40 mm was priced at USD 572/mt on Saturday and reached USD 609/mt ex-work including VAT by Tuesday, but
on Wednesday the average price returned to USD 607/mt. What is to be expected
in the flat products market after this is the increase in the price of slab
from Khuzestan Steel co and Hormozgan Steel co. As slab production has declined over the past
eight months and demand in the domestic market is upward this will make slab
price higher and won’t let HRC price decline in coming months.
Higher
ex-rate made CRC market quiet during first half of last week as price trend was
not clear and no one was willing to trade. Only on Tuesday when sellers started
offering, average price dropped from USD 779/mt to USD 775/mt. This is far from
previous Wednesday's average of USD 734/mt and does not appear to be back
again.
HDG
price was upward due to rising exchange rate and higher HRC price. The average
price on Saturday was USD 772/mt and increased to USD 797/mt ex-work including
9% VAT. Although the ex-rate declined, due to the limited supply of HRC, HDG
price did not decline.
CBI weekly average ex-rate for Steel Products (SANA): Rials 111.157
/ 1USD
16 Dec, 2019
----------------------------------------------
Iran Steel News Bulletin