Billet market was faced with a rise in prices despite falling prices at IME
( Iran Mercantile Exchange) from USD 545 /mt to USD 548/mt ex-work including 9%
VAT. The reason was empty warehouses of re-rollers which they had sold inventories
in advance in the previous weeks. New sales policy with LC payment that some mills
have adopted has helped to maintain the price, but it is not clear that this
trend will continue because it depends on the price and export volume of billet.
Also last week, according to Metal Bulletin, average price of Iranian
export billet price increased from USD 535-547/mt to USD 543-550 /mt FOB
Rebar price was stable at around USD 611/mt during last week in Iran. Generally,
market participants believe that price has reached the bottom, but currency rate
game should not be forgotten.
Higher demand for I-beam size 14 made its average price upward from USD 607/mt
to USD 617/mt by end of the week.
Price of 2 mm thickness HRC ex- work Mobarakeh was USD 944/mt on last Saturday,
which reached USD 952/mt by Wednesday. Mobarakeh Steel co HRC market generally was
almost stable due to weak demand.
Oxin co HRP still resists against market fluctuations, perhaps in part due
to previous sales of the mill that have not yet been delivered and the mill is
trying to maintain its market, but this trend cannot be sustained unless the mill
changes its sales policy or Increase the volume of its exports. Its average
price changed from USD 1038/mt to USD 1035/mt. Kavian co HRP remained stable at
USD 1010/mt with the mill management. We have to wait and evaluate the effect of
lower slab price at IME.
CRC was downward from USD 1188/mt to USD 1177/mt due to lower price of
Mobarakeh Steel co and decrease in market demand.
HDG was downward from USD 1212/mt to USD 1187/mt due to lower HRC price and
its supply volume.
have realized that the government is intent to the policy of offering all steel
chain products on IME, and as a result, pricing would be done by IME. Signs show
that market is also adapting itself to this system. In the last two weeks, we
have seen suppliers offering goods at IME who are not producers. This means
that the market is practicing to use the stock market more. What it barters
brings to IME, if it is not sold, it has the right to export it. Isn't this a
stock market program? So in the near future we should see that private sector will
have more pellets and DRI for export. But as long as prices of materials like
pellet, DRI and billet at IME are higher than export prices, we have to wait.
The policy of offering everything on IME does
not reduce market power because market is learning how to use the Mercantile
exchange. In the coming weeks, we will see more supply of mining products at
IME. Given the pressures from IME and the reduction of global prices, we should
expect a drop in price of iron ore to DRI in the IME, but will this trend be
transferred to the finished products or not? The result will be clear in the
future, but it should not be forgotten that most of the pellets and DRI are
produced on the basis of barter trades. Will the current trend not affect supply
and production level of these goods? Perhaps the stock market seeks to open up
the trading of all commodities to the commercial sector as the market
stabilizes, otherwise production will be severely damaged during this period as
the market waits. We must not forget that all policies are driven by demand
side too. With the progress of the nuclear talks, the exchange rate is also on
a downward trend, which will cause demand to fall. This is where the stock
market should be responsible for mills liquidity problems.
CBI weekly average
ex-rate for Steel Products (SANA): Rials 246,904/ 1USD
10 Jan 2022
Iran Steel News