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Iran steel market Trend in Week 37th , 2021

Iran steel market Trend in Week 37th     , 2021


Limited rebar demand made billet price downward during last week in Iran from USD 614/mt to USD 575/mt ex-work including 9% VAT by end of the week.  Increased offer level at IME and solving electricity problem strengthened the mentality of upward trend in supply side. Out of a total of 163,000 tons of billet offered on IME, only 13,000 tons were sold. This trend will make billet market supply in the next two weeks in trouble.

This affected DRI price too and market is more afraid of falling prices.

Long Products

Rebar market went through a dramatic condition during last week in Iran. Its average price dropped from USD 715/mt to USD 666/mt ex-work including VAT. This situation will put rebar producers in trouble with lack of liquidity. More competition to reduce prices in one hand and supply shortage in other hand would be evident. Out of a total of 61,000 tons of rebar offered on IME, only 2,800 tons were sold. In fact, this situation cannot be sustainable because it leads to closures and shortages of supply.

I-beam market was  downward as rebar. Its price dropped from USD 692/mt to USD 671/mt by end of the week. Everyone is waiting for prices to reach their bottom, while avoiding higher inventory, as a result of which downward trend has increased.

Flat Products

HRC 2 mm thickness ex-work Mobarakeh started the week on last Saturday at USD 1176 /mt, and reached USD 1072 /mt by Wednesday. Mobarakeh Steel co HRC had a downward trend, despite the fact that supply volume did not increase significantly, but lack of demand pushed the market back.

Oxin Co HRP price dropped from USD 1252/mt to USD 1233/mt ex-work including VAT due to mill’s higher supply level and demand stoppage. But market insiders expect this downward trend to be limited. Kavian Co HRP didn’t decline and stayed at around USD 1118/mt by supply management of the mill, the inventory of this product is low, therefore, mill’s power to control the market is strong.

CRC market also saw a drop in demand and stayed back. It was down from USD 1302/mt to USD 1266/mt by end of the week. CRC market inventory is low and would not let prices decline significantly. Following lower HRC price, HDG market was also declined by USD 10/mt to USD 1308/mt by end of the week. It seems that this trend will continue in the coming days.

Weekly Analysis:

Last week, Iran steel market was quiet and prices were downward. This sharp drop in prices discharged much of the " price bubble". Lower demand, which was the main cause of this trend, was mostly due to the psychological atmosphere created in the society. Everyone is waiting for the government plans to improve the situation but authorities did not give a specific explanation about the government's plan. This will confuse the market and in waiting policy.

Prices would go down and production would stop. Cutting production creates accumulated demand so when the confidence returns to the market, prices will rise sharply. In the current situation, due to lower production level, demand for semi- finished steel products has also decreased, and as a result, billet production has also decreased.

Market needs at least three weeks to be balanced. This return will be accompanied by severe liquidity pressure for producers. The only way for moving out of this situation is clarification of government's policies, while the government must ask help from the market and producers and do not make decisions in a closed space. This policy will create stability and help the government achieve its goals.

Market participants and producers will also help with confidence so that tensions will not arise. This policy has been pursued by China for three months and has caused iron ore to fall from above USD 200/mt to near USD 100/mt. It would be really applicable in Iran as well.

CBI weekly average ex-rate for Steel Products (SANA): Rials 229,540 USD

20 Sep 2021

Iran Steel News Bulletin




Sep 20, 2021 20:47
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