As rebar market was
quiet, the offered billet at IME did not have buyer and made market price down
from USD 665/mt to USD 655/mt ex-work including VAT. Also Higher base price at
IME during the week did not help demand. Mostly cheap purchased billets or cargoes
sold through LC payment were being traded.
Also last week,
according to Metal Bulletin, average price of Iranian export billet decreased
from USD 710-730 /mt to USD 682-695 /mt FOB.
Rebar price was almost stable, but from Tuesday onwards, its price began to
decline due to market silence from USD 741/mt to USD 740/mt ex-work including
VAT. The announcement of export tariffs for steel products made market shocked,
but market expect billet and DRI prices at IME be upward in coming days.
I-beam was downward like other long products due to lack of demand from USD
667/mt to USD 665/mt ex-work including VAT.
HRC 2 mm thickness ex-work Mobarakeh was USD 1002 /mt on last Monday, which
reached USD 1018 /mt by Wednesday. HRC market is generally relatively quiet. Its
market is waiting for a change. Perhaps fluctuations in the world market would
also help improve our domestic market too.
Oxin co HRP market
was almost quiet, its price changed from USD 1110/mt to USD 1113/mt ex-work
including VAT. Everyone is waiting for the price to decrease, but market
participants believe that it seems impossible.
CRC market was quite calm and did not change significantly from USD 1216/mt
to USD 1214/mt. HDG was unchanged at USD 1218/mt ex-work including VAT as HRC
price did not change significantly.
On last Tuesday, a
circular was issued by the Ministry of Industry, Mines and Trade, according to
which export duties were imposed on various minerals, steel, petrochemicals and
cement. In this circular,
the duties mentioned are retroactive, and for this reason, it caused a big
shock to the exporters of these goods and many expressed their oppositions.
As the announcement
of this circular came as a severe shock to the market, the reactions to it in
the market environment were more emotional.
The Steel Association expressed its criticisms, but the question arises as
to why the government has considered such tariffs when it is well aware of its
It is heard that this decree is for a maximum period of two months until 21st
of May and the base price will be determined after that. Some says this period
is a trial period until the end of May.
The results of these export tariffs will be seen in the market as follows:
1- Market will stay back and steel purchase would decline more.
2- Liquidity pressure on mills will increase. They do not sell their
products but on the other hand, the facilities of banks have not been fully
opened yet, but they have to pay taxes.
3- The sharp fall in prices due to the distrust of market to government
policies and the competition of producers to achieve more liquidity.
4- Rising prices due to declining production of mills facing liquidity
5- Higher price for finished product due to lower supply level and higher
currency rate, which would be due to decline in export level.
6- Returning to the first point, but with accepting the great losses of
this period, which takes a maximum of 2 months.
It should be noted that prices in the world market have calmed down and are
likely to decline for two reasons. The first is the stabilization of oil
prices, the second is epidemic in China. With the end of Covid-19 restrictions
in Shanghai, Chinese demand will enter the market and the world market price
will improve again, in which case the government will not achieve its goals.
Market participants should be aware that the increase in prices in the domestic
market is affected by the increase in production prices, so the probability of
prices returning to the beginning of the year is very low, but a decrease in
prices is likely in the short term.
CBI weekly average
ex-rate for Steel Products (SANA): Rials 244,469 / 1USD
18 Apr 2022
Iran Steel News