Iran steel market had a short working
week as Eid al-Fitr Holidays was coming last week. Due to the upcoming Holidays,
billet market remained almost unchanged at USD 638 /mt ex-work including VAT
during the week. Billets offered at IME also were not ended in any deal as their
prices were higher than spot market rate.
Rebar price was also
almost unchanged at USD 719-720/mt ex-work including VAT. I-beam market was
also in Holiday mood at USD 661/mt.
HRC market was quiet due to absence of
big traders and its price has reached the bottom level. HRC 2 mm thickness
started the week at USD 995/mt and was USD 1016/mt ex-work Mobarakeh before
market was closed for Holidays on last Monday.
Oxin co HRP was stable at USD 1074/mt. Big
traders were absent and prices are at the bottom.
CRC was also unchanged at USD 1185/mt and
HDG at USD 1186/mt.
Downward trend in
all market parts recently has caused concern among economic actors. Downward
trend of prices in the world market along with opening of the negative 3% range
in IME has caused traders to withdraw from buying from the exchange market,
which is quite logical. The fact is that spot prices are lower than IME. The
stock market has its own criteria and the spot market has its own. The reason behind
lower prices in global and domestic market is limited demand. Demand in the
global market has dropped sharply due to the holy month of Ramadan and the long
Eid al-Fitr holiday in Muslim countries. The Chinese market is virtually
inactive due to Covid restrictions. In the Islamic countries the market will be
active after a month these days.
In China, the
government is fighting hard against coronavirus epidemic and has taken economic
measures to avoid a recession that will lead to a boom in construction after
the pandemic disappears. Chinese are also expected to return to the market
within the next month, so the market will be faced with delayed demand coming in
But on the supply
side, Ukraine supply has been completely destroyed and Russian products are
facing sales problems due to very severe sanctions. Russia's foreign trade is expected
to fall by 30% in the next three months. On the other hand, the imposition of
duties on Iranian export has also caused Iranian mills to withdraw from export
market within the past month.
Thus, on the one hand, world market is facing with
suppressed demand, and on the other hand, with the supply being reduced, prices
will naturally rise after demand problem is resolved, because Russia steel supply
in the world market will be limited.
In the domestic
market, lower demand had made buyers absent. Return of prices to March level is
also impossible, as cost prices have risen, especially wages and freight. Power
outages are imminent too, so there is potential for increased demand and
reduced supply in both the domestic and foreign markets. For this reason, the
downward trend in prices cannot continue.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 248,104 / 1USD
09 May 2022
Iran Steel News Bulletin