Billet price went up last week in Iran domestic market by
USD 10/mt to USD 662/mt ex-work including VAT. Higher ex-rate made prices up and
the most important factor was sharp decline in supply at IME. Induction billet mills
were absent, and after nearly two months, this intensified competition for
purchases. The most important reason behind higher competition was also
re-rollers’ concern about power cuts and its impact on reducing billet supply level.
Average price of rebar increased from USD 733/mt to USD 747/mt
ex-work including VAT. Two factors were effective in increasing rebar price,
the first was higher billet price at IME and the second was announcement of an
increase of about USD 20 /mt in base price of DRI for next supply. For this
reason, rebar market surged on Wednesday, but trading was limited as market was
not able to absorb this price increase. At the same time, there is no hope for
this price increase to remain stable.
I-beam price went up like other long products, but cheap purchased
inventories won’t let this price increase to remain.
Two mm thickness HRC ex-work Mobarakeh was USD 959 /mt on last
Monday, which reached USD 975 /mt by Wednesday. Higher ex-rate and rising
market concerns about political issues, along with rising billet price, pushed HRC
price up. It is not clear that with the reduction of global slab price, Mobarakeh
Steel co policy would be to reduce prices or keep them unchanged.
General market sentiment also affected Oxin co HRP market.
It was changed from USD 1041/mt to USD 1045/mt. Market inventory has decreased,
but lack of demand does not allow prices to grow.
Different currency rates
and political issues, made CRC price also increased from USD 1185/mt to USD 1188/mt,
but the stability of this trend in coming weeks is under question.
Rising HRC price as well
as rising zinc prices pushed HDG price up from USD 1176/mt to USD 1185/mt
ex-work including VAT.
In global markets, China has
not yet been seriously activated, but rising iron ore prices have improved
market sentiment, while oil and coal prices have remained firm. Rainy Season in
some countries and Russian cheap offers are the forces that have kept prices
from rising. For this reason, global steel market trend in coming months is not
clear, but market insiders mostly believe prices will rise and demand would
improve. What is certain is that the role of Russian dumping will diminish with
the activation of Chinese market, but continued high oil prices and global
inflation exacerbate concerns about a severe recession and fuel it every day.
But in the Iran market:
Steel market is trying to
separate its away from government directives. Prices rose and the market was
waiting for it, but Wednesday's recession was also conceivable. In practice,
the market has shown that rebar price range would be between USD 690-730/mt and
it takes time to digest prices above USD730/mt. Some news talk about heavy
supply of billet for the coming days. Since power cuts are very likely by all
those involved, billet offers on IME will be sold. In this case, billet will be
offered this week with a three percent price increase. If this trend continues,
billet market inventory will reach bottom at the end of July, which will not be
easily replaced due to the electricity problem. The government is seriously
pursuing price control through IME and will not allow prices to rise, but its ability
must be weighed against market forces, especially global market, which if there
is an upward trend, there will be no justification for the government.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 246,050/ 1USD
13 June 2022
Iran Steel News Bulletin