Recently, Ministry of Mines and Trade has issued a letter to all the steelmakers in Iran to sell their products in Iran Mercantile Exchange (IME) this week at the base price decided by the government, apart from selling in domestic market. According to the letter, steelmakers has to offer their billet and slab at a base offering price of IRR 22,916/KG (USD 520/MT) and IRR 24,238/KG (USD 550/MT) respectively.
The letter also listed the base price of HRC and CRC as USD 580/MT and USD 645/MT respectively. It is to be noted that the price which government has set is almost half of the prevailing market price. The letter also restricted the control to increase the prices in IME to 5% from 10%.
After the issuance of the letter, billet prices in Iranian market soared up by around 20% on Monday and reached IRR 45,150/KG (USD 1023/MT) against the market price of IRR 37,600/KG (USD 852/MT) traded on Saturday. Billet price remained stable on Tuesday and inched down slightly on Wednesday to IRR 43,390/KG (USD 984/MT). Rebar prices were also hovering at IRR 53,000 to 54,000/KG (USD 1200-1230/MT).
According to Planner “ Because of this rule steelmakers are forced to sell their product on fixed base price, these could cause massive rente for buyers in this way of selling on IME”.
| Commodities | 28/7/2018 | 29/7/2018 | 30/7/2018 | 31/7/2018 | 1/8/2018 |
| Scrap | 23,180 | 23,800 | 23,990 | 24,880 | 25,170 |
| Billet | 37,600 | 41,670 | 45,150 | 45,150 | 43,390 |
| Rebar | 43,140 | 46,690 | 52,560 | 54,280 | 53,280 |
| Difference between Scrap-Billet | 14,420 | 17,870 | 21,160 | 20,270 | 18,220 |
| Difference between Billet-Rebar | 5,540 | 5,020 | 7,410 | 9,130 | 9,890 |
Source: Planner
Quantity in KG
1 USD = IRR 44,110
Khouzastan Steel Company and Khorasan Steel Company Offered Billet at IME
After the implementation of the order from Ministry of Mines and Trade, on 1st Aug’18, Khouzastan Steel Company and Khorasan offered their billet at IME. Khouzastan offered 20,000 MT billet at IRR 22,916/KG (USD 520/MT) and sold 40,000 MT at IRR 24,061/KG against the demand of 372,000 MT.
On parallel lines Khorasan Steel Company offered 5,000 MT billet at IRR 22,916/KG (USD 520/MT) and sold 5,000 MT at IRR 24,061/KG against the demand of 36,000 MT.
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