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Iran Steel Market Trend in Week 19th, 2022

Iran Steel Market Trend in Week 19th, 2022

Billet

Billet price increased during last week in Iran because market mentality was that prices have reached the bottom. Average price increased from USD 640/mt to USD 651/mt ex-work including VAT. As power cuts in near future is possible, more supply of long-term sales by mills at IME has increased purchase volume.

Long Products

Rebar price also went up. The market thought that its price has reached the bottom, so traders tried filling up warehouses. Rebar was changed from USD 722/mt to USD 725/mt.

I-beam price increased from USD 664/mt to USD 674/mt as the market believed that it should go up.

Flat Products

HRC price was downward, but rose slightly over the weekend. Market is still confused and does not know what the price trend will be. Two mm thickness HRC ex-work Mobarakeh was USD 983 /mt on Saturday, which reached USD 991 /mt by end of the week.

Oxin co HRP had a slow downward trend. Its price has reached the bottom, which is why traders are not willing to sell.

CRC market was quiet. Only reacted slightly over the weekend with a rise in ex-rate from USD 1184/mt to USD 1199/mt ex-work including VAT.

HDG market was quiet and over the weekend, despite higher ex-ate, it decreased slightly from USD 1185/mt to USD 1181/mt.

Weekly Analysis:

Factors influencing the market continue to show strength.

1. Continued lock-downs in China has severely limited demand, so prices around the world are either unchanged or downward like slab.

2. Russia-Ukraine war has led to competitive Russian goods become available in many markets. These goods with low prices in the absence of Chinese demand have caused a drop in global prices especially in scrap, billet and slab market. These are the three main steel related raw materials in the China market. If China market remains closed, prices will not have much room to fall as prices have reached near levels before the Russia invasion of Ukraine.

3- Oil price has not changed significantly so steel cost prices does not have much room to decrease. Raising interest rates in the United States is just an attempt to stabilize prices or perhaps slow down inflation rate.

4- There are two influential factors in the domestic market. The first is the general atmosphere of the market, which participants have stopped buying with the beginning of downward trend in prices and now they think prices have reached the bottom. Secondly downward prices would virtually eliminate the issue of export tariffs. Therefore, export level will improve.

5- The determining factor in the coming days is the issue of power cuts and its impact on production, which will make prices upward.

The price gap between DRI, scrap and billet price is very limited compared to March prices. In fact, there is little room for further price reduction. If power cuts issue is serious, prices will rise rapidly.

The last point is that the policy of depositing huge volumes of subsidies in a short time has increased the speed of money circulation. On the other hand, eliminating subsidies and unifying the currency rate in the face of budget deficit with inflation is a very heroic risk that the government has accepted. Continuation of these conditions will increase the inflation rate, which will inevitably affect the steel market.

CBI weekly average ex-rate for Steel Products (SANA): Rials  248,302 / 1USD

16 May 2022

M.Chitsaz

Iran Steel News Bulletin

IFNAA.IR

IRSTEEL.COM

May 16, 2022 12:05
Number of visit : 516

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