Billet
Billet price in Iran
domestic market was stable until Tuesday at around USD 590/mt during last week,
but with the competition of buyers, market went up because most of the offers
were sold. Its average price finished the week at USD 596/mt ex-work including
VAT.
Also last week, according to Metal Bulletin, Iranian average export billet was
up from USD 550-555/mt to USD 560/mt FOB.
Long
Products
Domestic rebar market started the week stagnant, but was strengthened after
billet sales. IME new policy which stopped the reduction of billet price for
the next week, gave hope to the market and boosted trading level. Average rebar
price firstly was down from USD 655/mt to USD 650/mt, then improved to USD 656/mt
ex-work including VAT by end of the week.
I-beam market also started the week downward from USD 643/mt to USD 634/mt,
then improvements in rebar market made it up to USD 640/mt.
Flat
Products
The price of HRC 2 mm thickness ex-work Mobarakeh was USD 960/mt on last Saturday,
which reached USD 910 /mt by Wednesday. Mobarakeh Steel co HRC market had a
downward trend due to mill’s wide supply, low price, fast delivery and most
importantly its payment method. It is heard that mill’s marketers are trying to
attract customers, so downward trend in prices will continue, especially for
low thicknesses, part of which is supplied from import. Considering the
delivery of 400,000 tons of products sold on IME for April delivery and the
decrease in demand in coming two months, market return before May seems
unlikely.
Oxin co HRP market was stagnant earlier last week. With the increase in the
price of slabs, downward trend stopped, but available inventories along with downward
trend of mill’s prices have decreased expectations of improvement in the
market. Its average price changed from USD 1072/mt to USD 1058/mt. Kavian co
HRP similar to Oxin product, started the week with mill’s resistance against
downward trend, but finally declined over the weekend by USD 8/mt to USD 994/mt
ex-work including VAT.
Mobarakeh steel co CRC supply lowered market average price from USD 1176/mt
to USD 1171/mt. Cold weather and power outages also helped this trend as it
reduced demand level.
Lower HRC price made HDG also downward from USD 1221/mt to 1204/mt ex-work
including VAT.
Weekly Analysis:
Billet and long
products had an increasing trend during last week due to the following:
1- Lack of DRI supply
at IME
2- The pressure of billet
producers to increase the price because the offered prices at IME did not have
an attractive profit margin for many producers, especially the producers of
induction billet.
3- Market caution in
buying billet in previous weeks due to the uncertainty of IME policies and the
possibility of reducing its price
4- Power outages of
some billet producers, which reduced supply level
5- Disconnection of
some cities due to snowfalls and transportation problems
6- Empty warehouse
of re-rollers
Contrary to
expectations, billet trade at IME was faced with competition and prices rose.
Reasons for price increases include:
1- Increasing global
billet price
2- Higher demand
level from re-rollers
3- The reluctance of
billet sellers to further reduce prices
4- Possibility of
higher billet export level due to lack of domestic demand during previous weeks,
which increased the export level. Especially with the increase in coal prices
and freight rates, the desire of foreign buyers for imported billet has
increased, on the other hand, the cold weather and the crisis in Ukraine have
had a negative effect on the supply of CIS billet too.
5- Rumors heard
about opening export market of billet and long products
According to the
announcement of IME, which said the range of decrease in the price of billet as
zero percent and the range of its increase to 3 percent, confidence returned to
the market and this caused the billet offered at IME as well as long products
to be welcomed by buyers. Demand for billet and flat products exports has now
fallen to a minimum due to holidays in China and many buyers in the Far East.
As we have seen recently, fluctuations will be limited due to cheap
purchased billet and rebar in the last two weeks, increased inventory level and
the weakness of real demand. But the market will not be predictable if the
government wants to change this trend.
In flat products
market, it is facing with two phenomena. Mobarakeh Steel co heavy supply in the
form of LC and delivery of goods before the due date of the credit, which has
caused the price of HRC, especially the thickness of two millimeters, to fall
sharply, as many traders have sent their inventories to the market, worried
about oversupply. On the other hand, the decrease in the Oxin co HRP sales
price, pushed the price of this product down in the first days of the week, but
at the end of the week it went up due to improved market demand. In any case,
there does not seem to be a serious change in the status of flat products
market in February due to its inventory level, unless demand changes.
In general, the
government has been trying to make it clear to the market in the last three
months that it is the government that decides and determines the supply,
apparently it does not intend to pay attention to the past.
CBI weekly average
ex-rate for Steel Products (SANA): Rials 238,410/ 1USD
07 Feb 2022
Iran Steel News
Bulletin
IFNAA.IR
IRSTEEL.COM