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Iran Steel Market Trend in Week 20th, 2022

Iran Steel Market Trend in Week 20th, 2022

Billet

Billet price was downward from USD 664/mt to USD 647/mt ex-work including VAT. Downward market prices, no buying interest last week and declining prices by 3% every week by IME (Iran Mercantile Exchange), reduced prices. Market confusion and the impossibility for making decisions were also among the reasons for the decrease in demand and prices.

Long Products

Weak demand, whether in the domestic or global markets, has minimized the tendency to buy and has resulted in lower prices. Rebar average price dropped from USD 745/mt to USD 738/mt including VAT. Of course, the market has had its own price in recent weeks and look at IME as a tool. In case of price increase at IME, production side which is facing a lot of empty capacity, will make prices balanced.

I-beam price improved slightly by USD1/mt to USD 689/mt. The reason was that its price is lower than floor prices and traders have stopped selling.

Flat Products

HRC price has reached its bottom. This price is lower than cost price for traders. That's why sales were closed from Wednesday. Price of 2 mm HRC ex-work Mobarakeh on Saturday was USD 1001 /mt, which reached USD 976 /mt by end of the week.

Oxin co HRP was faced with a downward trend from USD 1077/mt to USD 1067/mt. This situation is not stable because its cost price is quite close to its buying price. On the other side, supply level is very slow.

CRC price dropped a little from USD 1217/mt to USD 1201/mt ex-work including VAT. Its market has no space for further cuts.

HDG price improved slightly over the weekend from USD 1197/mt to USD 1207/mt due to rising HRC prices.

Weekly Analysis:

Prices have reached bottom level both in Iran and global markets. The sign is that the downtrend in global prices has reached USD10-20/mt, billet has been heard up to USD 550 /mt, but not much deal. Mills must either stop production or sell at previous prices, thus would prefer reducing production. If these condition continues, supply volume will decrease.

 But several factors can break this silence.

The first is power cuts. Power outages are not just about generating electricity. More important is the transmission capacity, which has not been invested in it during last ten years, while consumption has increased by 20% annually. Increasing power transfer capacity cannot be solved with money alone, it is time consuming and has many technical problems.

The second one is China issue. China market has been closed for three months and will be open in a few days. As a result, a lot of demand will flood the market at once. We have to wait and see if another directive will come from the government to suppress exports again or not?

The third thing that will make the price increase inevitable in the coming months is the issue of velocity of money and liquidity which if not controlled will end in higher inflation rate.

CBI weekly average ex-rate for Steel Products (SANA): Rials  246,813 / 1USD

23 May 2022

M.Chitsaz

Iran Steel News Bulletin

IFNAA.IR

IRSTEEL.COM

May 23, 2022 13:01
Number of visit : 443

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