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Iran Steel Market Trend in Week 15th, 2022

Iran Steel Market Trend in Week 15th, 2022

Billet

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.

Long Products

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.

Flat Products

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.

Weekly Analysis:

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 effects.

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 problems.

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

M.Chitsaz

Iran Steel News Bulletin

IFNAA.IR

IRSTEEL.COM

Apr 18, 2022 15:25
Number of visit : 650

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