Billet price improved a little by end of last week from USD470/mt to USD 477/mt ex-work including VAT. With the events that happened at IME, the market became confident that downward trend has stopped, the same thing has happened in global market.
After the disastrous trend of previous months, rebar price improved a little with the announcement of price stabilization at IME and market sentiment improved. Average rebar price was USD 563/mt by beginning of the week, declined to USD 547/mt by Monday then improved to USD 558/mt by end of the week.
I-beam price also stopped declining by end of the week with new pricing instruction at IME. It started the week at USD 619/mt, by Monday became USD605 /mt and finished the week at USD617 /mt ex-work including VAT.
Two mm thickness HRC ex-work Mobarakeh was USD668 /mt on last Saturday, which decreased to USD661 /mt by Wednesday. Despite the rumors about announcement of new base price of Mobarakeh Steel co at IME, it stabilized and improved for some thicknesses. It is not possible for traders to reduce the price more than this, and if Mobarakeh lowers its prices, the market will suffer a severe recession.
According to the policies of Oxin co, HRP price was almost stable despite lower global slab price, but demand in the market was not very strong. Its Average price was changed from USD 898/mt to USD 889/mt ex-work including VAT.
CRC price did not change much from USD 993/mt to USD 991/mt. Practically, price of this product is the same at IME and spot market, and therefore there is no reason for more declines.
HDG market fluctuated like HRC market and reached the bottom of USD916 /mt. Currently, supply level is much more than demand, but since the price has reached its bottom, traders cannot imagine possibility of more discount.
Global billet and scrap prices have reached the bottom and the probability of more reduction is weak. When summer holidays in world markets finish in August, markets will become more active. Market insiders expect global billet price to be not lower than USD 400 /mt FOB. Considering price of oil, iron ore and freight does not allow this reduction, even the Russians do not want to reduce the prices with their dumping. There are signs of beginning of Chinese activity and their return to the markets can change the situation.
In Iran market, IME finally came to accept that the state of domestic economy should not be tied to the conditions of the global market, and for this reason, it changed the pricing formula, as a result of which market sentiment improved. Impact of this event will be tangible in next month, because two weeks ahead coincide with days of Mourning Holidays of Moharram, and the week after that, would be last week of the month, the market is practically not active.
What is certain is that not only warehouses are empty, but also most mills do not have the desired inventory due to lower sales. Therefore, in case of better market liquidity, billet market would be more active.
In flat products market, most of prices have reached the purchase price of previous two months, and for this reason, it is not possible for traders to give discounts. Continuation of this situation in flat products market will lead to repetition of rebar market scenario. The main problem of market in the current situation is the lack of trust and the instability of government policies.
CBI weekly average ex-rate for Steel Products (SANA): Rials 284,294 / 1USD
06 August 2022
Iran Steel News Bulletin