Billet price had an almost stable trend during last week in Iran domestic market despite higher
supply level at IME ( Iran Mercantile Exchange), but due to liquidity
restrictions, the competition on the price was very limited. At the same time, IME
proposed new definitions regarding DRI buyers for billet production use. Billet market ended the week at average price of USD 591/mt compared to USD
583 /mt a week a go.
According to the atmosphere created regarding
the possibility of restarting Nuclear talks and lower ex-rate, rebar market was
a little downward during the week , while its average price improved by end of
the week to USD 701/mt cpmpared to USD 691/mt by beginning of the week.
Besdies, its demand is very limited,
while most mills do not have a full range of all sizes available due to
liquidity problem and the inability to buy billet in spot market.
Lack of demand, made I-beam market downward
from USD 839/mt to USD 808/mt ex-work including VAT. Esfahan
Steel co is trying to control prices by managing the supply level, because traders’
profit margin has reached the bottom and this will question the future sales of
Esfahan Steel co.
HRC 2 mm thickness declined from USD 925/mt to USD 917/mt ex-work
end of the week. Mobarakeh Steel co offered its HRC at a price lower
than slab price which surprised the market, but actually this was a bonus for
the buyers and it seems that Mobarakeh Steel co products have reached the
Limited supply level made Oxin co HRP price slightly
downward from USD 870/mt to USD 866/mt by end of the week.
CRC market was changed from USD 1385/mt to USD
1354/mt, while Mobarakeh Steel co is lagging behind in its supply level.
Due to the decrease in ex-rate and downward
HRC market, HDG price also fell from USD 1358/mt to USD 1314/mt ex-work
In world market:
The global market is still in a downward
trend. Pushing Turkey Presidential election to the second round has delayed the
possibility of upward scrap price at least until the next month. Oil price is
hovering around USD80/barrel, which means that billet prices will remain below
USD500/mt FOB. In the last two weeks,
the rate of the Chinese yuan has fallen against the US dollar, and this will
cause China's exports to increase and its imports to decrease. As a result, the
Chinese will offer their billet in the world markets like ten years ago and
become a serious competitor for Iranian exporters, there is no hope for prices
to rise in the world market, especially since summer holidays are near.
In domestic market:
The government is strongly trying to control prices,
and for this reason, it puts pressure on the price and supply volume of beams,
rebars and flat products, while price of mineral products, especially pellet,
has increased in the stock market during last three weeks.
In fact, the government is closing the gap
between raw materials and finished products in the stock market. Since the global
market is in recession, this issue has a negative impact on steelmakers’
margins. The policies
intended to control export in order to control the domestic market along with
increasing price of pellet and DRI on one hand and controlling the exchange rate
on the one hand, help this matter.
CBI average ex-rate for Steel Products
(SANA): Rials 381,559/ 1USD
22 May 2023
Iran Steel News Bulletin