price was almost stable during last week in Iran domestic market. It started
the week at USD 614/mt and finished it at USD 626/mt ex-work including 9% VAT. Demand
level was not enough to cover even 50% of offered cargoes at IME ( Iran
Mercantile Exchange). Talks about new regulations and government control
confused the market but prices do not appear to fluctuate significantly.
Rebar market had the potential for higher prices
and showed some signs, but rumors over new regulations and government policies
controlled the market. Its average price changed from USD 678/mt to USD 689/mt ex-work
including 9% VAT.
I-beam market was stable and any improvement
expectation was weak. It was changed from USD 686/mt to USD 690/mt
ex-work including 9% VAT.
HRC 2 mm thickness ex-work
Mobarakeh was USD 1100/mt on last Saturday, which reached USD 1144 /mt by
Tuesday. The market has reached its bottom. Mobarakeh's lack of supply also
stabilized the market.
Oxin co HRP had a
stable market. Due to mill’s policy and limited suppliers, its price does not
seem to fluctuate significantly. It was changed from USD 1136/mt to USD 1150/mt
ex-work including 9% VAT during last week.
Kavian co HRP didn’t
changed at USD 1072/mt through the week due to the mill’s control.
CRC market was
unchanged at around USD 1251/mt due to limited demand.
HDG market was quiet
at around USD 1293/mt due to stable HRC price and lack of demand.
Last week, market insiders were expecting some
improvement in prices due to rising global scrap and billet prices, but discussions
about government new policy and the possibility of applying 80% of global prices
as a basis for domestic market pricing, made market quiet. Market has noticed
that despite advertisements, rebar price floor is USD 640 /mt and its ceiling
is USD 734/mt. Billet price won’t be less than USD 561/mt and Mobarakeh Steel
co HRC will not be less than USD 1036/mt. The new policy seeks to control the
domestic market in order to increase share of export market.
The market, as
always, will adapt itself to new conditions but the only question left is that
with the increase in global oil and gas prices, will steel price remain the
same? And how would Iran Mercantile Exchange, based on 80% of world prices,
adapt the domestic market to this trend? Perhaps the government's hope is a
drop in global demand due to the cold winter season. But cold weather just saves
demand but does not destroy it.
What has happened at
the national level in the last two weeks has been the limitation of bank
lending, which is due to the government policies and central bank controls.
This trend follows the stability of exchange rate. In fact, the government must
increase exports but should control inflation level too. It need to raise taxes to make up for budget
deficits, and besides pursues the housing program to create new jobs. Other
countries have followed the similar policies in the past, and history has
recorded the results. The question is, is there no other way?
CBI weekly average
ex-rate for Steel Products (SANA): Rials 231,705 USD
25 Oct 2021
Iran Steel News