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
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.
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.
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
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