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Iran steel market Trend in Week 35th , 2021

Iran steel market Trend in Week 35th    , 2021

Billet

Billet price was downward during last week in Iran. Government and IME ( Iran Mercantile Exchange)  efforts along with falling global prices were the main reasons for this price decline. Billet was down from USD 703/mt to USD USD 660/mt ex-work including 9% VAT. While global markets are still declining and ex-rate is downward, it will make average prices downward but this situation would not be permanent as export market is stopped to balance the market.

Regardless of whether  global prices are declining or rising, our foreign currency needs and excess supply will be the starting point for higher export.

Long Products

Rebar price was down from USD771/mt to USD 751/mt ex-work including VAT during last week in Iran. Anti-inflationary expectations, demand stoppage, declining exports due to seasonal conditions and China's behavior are the main reasons for this trend. In addition, higher Covid-19 cases has slowed construction projects, but demand for $ 1 trillion in US infrastructure modernization has not yet begun. This is a strong point in the coming months.

Lack of demand made Ißbeam price down from USD 738/mt to USD 719/mt.

 

Flat Products

Mobarakeh Steel co HRC 2 mm thickness on last Saturday was USD 1267 /mt, which reached USD 1227 /mt by Wednesday. The mill’s HRC was traded in cash at IME so the base price was lower than in previous weeks. However, the same price reduction affected the market. In any case, the trend of Mobarakeh supply is not so that make market worried, while global HRC demand is also stable.

Oxin co HRP had a downward trend due to slow market demand from USD 1329/mt to USD 1311/mt. Kavian co HRP resisted against limited demand for a few days, but eventually became downward from USD 1151/mt to USD 1138/mt by end of the week. However, the supply management of this product still remained.

CRC inquiries was limited  so the price was down from USD 1363/mt to USD 1338/mt ex-work including VAT. Power outages in consumer factories continued to decline demand for the product.

HDG market was affected by lower HRC prices and ex-rate. Limited demand was also behind the downward trend as its average price declined from USD 1381/mt to USD 1357/mt by end of the week.

 

Weekly Analysis:

The government seeks to balance steel market and therefore controls its export level. But this trend will reduce currency supply and increase ex- rate. On the other hand, power outages have drastically reduced exports in the past two months. At the end of September, the foreign exchange returned to the country from export market will decrease significantly compared to three months ago, which will really affect the ex-rate. But this trend in the next three months can not be sustained for various reasons, especially weak domestic market demand.

Apart from these issues, in any economy, after a period of sharp inflation, in a short period of time, there is a time for breathing of the economy, which is accompanied by a recession, but in this recession, prices do not return to levels before inflation.

In Iran, inflation is not only due to monetary and financial issues, there are also structural issues such as electricity and budget deficit. However, the new government is facing serious problems and must solve the problem of inflation at first, otherwise, as most economists predict, inflation will open up and this time it will not be easy to control it.

CBI weekly average ex-rate for Steel Products (SANA): Rials 228,129 USD

06 Sep 2021

Iran Steel News Bulletin

IFNAA.IR

IRSTEEL.COM

Sep 6, 2021 15:01
Number of visit : 530

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