Billet price was
upward during last week in Iran domestic market from USD 743/mt to USD 834/mt ex-work
including VAT. Cancellation of transactions at IME ( Iran Mercantile Exchange) in
the previous week, upward exchange rate and hidden steel market demand were all
the reasons behind upward trend.
Like billet market, cancellation of
transactions at IME and higher currency rate increased rebar price from USD 939/mt
to USD 980/mt ex-work.
High demand due to market management by
Esfahan Steel co along with upward exchange rate caused I-beam price to rise
from USD 1161/mt to USD 1269/mt.
Price of 2 mm thickness HRC ex-work Mobarakeh was USD 1351 /mt on
last Sunday, which reached USD 1393 /mt by Wednesday. Limited demand and ex-rate
rise fueled market inflationary expectations.
Limited supply level of Oxin co HRP besides currency market issues
made HRP up from USD 1163/mt to USD 1244/mt.
Limited supply coupled with talks of a overhaul next year at
Mobarakeh Steel co production line were the main reasons for upward trend in
CRC market as changed from USD 1941/mt to USD 2064/mt ex-work including VAT.
Higher HRC price and upward ex-rate which affected Zinc price, made
HDG upward from USD 1951/mt to USD 2104/mt.
Global market outlook and
China market future sentiment is positive. The earthquake in Turkey has made
scrap price upward which may reach USD 500 /mt CFR Turkey. With spring and
better weather condition coming, construction projects will be activated and
increase steel demand level globally.
In domestic market; the
sitiation have different aspects:
On the one hand, export
demand has to be considered. In the export ring billet was sold at up to Rials 230,000
/KG base price, and its fob price is not below USD 540 /mt FOB Iranian ports.
Regarding rebar, there have been talks about rebar price of USD 600 /mt ex-work
mills in Azerbaijan Province, so the price trend and export level are both
upward which will reduce the volume of domestic supply and rise prices more. On
the other hand, DRI supply shortage is seen in the entire steel production chain
in Iran. Its supply is still limited and deliveries are delayed. Therefore, any
improvement in billet supply level until end of April should not be expected.
Meanwhile, re- rollers
are struggling with the problem of billet shortage. In order to balance the
market, the government has practically adopted policy of limiting demand and
hopes that by the end of April, with higher DRI supply, production level will
increase and prices will decline. This policy has caused demand pressure on the
current warehouse inventories and made prices up. Finally, the market would
realize that it should rely on its own forces. The biggest problem of the
government is that it does not refer to the market and producers to ask them to
give a solution, even like other countries, it does not look for tools such as
heavy taxes in exchange for increasing the price above the desired price, but
it targets the production, and this causes More imbalance in the market.
Apart from all this, currency
market is the issue. On Thursday, free market was expecting a decrease in the
exchange rate, but the opposite happened. This is the main issue, if the ex-rate
continues to increase, as there are export demand for semi- finished and final
steel products, it will simply neutralize
improvement in DRI supply. In any case, currency market fluctuation is the main
player at the moment in Iran Steel market.
CBI weekly average ex-rate for Steel
Products (SANA): Rials 285,000/ 1USD
27 Feb 2023
Iran Steel News Bulletin