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.
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
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.
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
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
CBI weekly average ex-rate for Steel
Products (SANA): Rials 246,813 / 1USD
23 May 2022
Iran Steel News Bulletin