Billet price was downward during last
week in Iran domestic market from USD 552/mt to USD 540/mt ex-work including
VAT by end of the week. The reason was stagnation of long products market.
Limited supply of billet on Tuesday along with the increase in its base price at
IME by end of the week moved the market a little.
Lack of demand made rebar
price downward from USD 641/mt to USD 627/mt. Announcement of higher base prices
at IME at the weekend improved market sentiment.
I-beam was like
rebar quiet and dropped from USD 652/mt to USD 649/mt. On last Sunday, it was moved
up to USD 661/mt due to higher ex-rate, but lack of demand caused price to
Price of 2 mm HRC ex-work Mobarakeh was USD
799 /mt on last Saturday, which reached USD 756 /mt by Wednesday. HRC price
decreased due to lower prices in global markets and concerns about lower base
prices at IME.
Oxin co HRP price was down by USD 8/mt to
USD 936/mt due to higher supply of the mill and lack of demand.
CRC market was almost stable at USD 1044/mt
during the week despite scarce demand level. Limited supply level helped
HDG market followed HRC trend and was quiet
at USD 1039/mt ex-work including VAT.
Scrap and billet
price has increased in world market which will improve prices in Iran market,
but it depends on continuation of this trend. Russian dumping in the steel
market continues and if prices rise, aggressive policy of the Russians in the
steel market will intensify. Concerns about recession in many western countries,
no improvement in China property market and continued heavy rains in the Far
East indicate this. All governments are aware of this, that's why the Chinese
government has set aside a part of next year's economic stimulus budget for
this year. High steel inventory at Chinese mills due to limited of consumption
during lock downs has caused a number of Chinese mills to undergo maintenance
plans ahead of schedules. Apart from these, oil went below USD100 last week
after 5 months, although it was temporary, but some negative forecasts talk
about possible USD 67 for oil price in future due to possible recession in the
West, even a more pessimistic analysis has stated USD47 also possible. Market current
sentiment does not indicate that demand will rise unless Chinese market be
activated in August. If oil price move downward, naturally, steel prices will
also be downward in world and also Iran domestic market which would be very
important for economic activists in Iran.
It should not be
forgotten that the effect of lower price of oil and steel is very important in
our foreign trade too, because it will reduce the foreign exchange income, as a
result, currency rate will rise.
In any case, recession would be the result of
these events. Economic activists usually reduce transaction level in this situation
and, more importantly, shorten the investment return period as much as
possible. Finally, lower trade level, a drop in production and difficulty of many
mills to survive would be the result.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 277,663/ 1USD
11 July 2022
Iran Steel News Bulletin