Iranian domestic billet market has been affected recently due to lack of demand owing to winter season in the nation. The market is flooded with steel owing to ample supply, but due to weather conditions, the transportation of billet has been declined significantly.
According to SteelMint assessment by considering the official exchange rate of IRR/USD as per CBI, during the beginning of last week (12 Jan’18- 17 Jan’19), domestic billet offers were noted to be around IRR 30,500/KG (USD 370/MT). Prices remained stable for two consecutive days. Towards the end of week, billet offers were noted to be around IRR 30,600-30,650 (USD 371/MT). It is to be noted that 1 USD as per CBI exchange rates in NIMA system is currently IRR 82,523.
As per Planner, “Market condition in Iran is not so good. Prices are down since there is a recession in the market and there are ample supplies. Export is getting harder due to foreign and domestic issues.”
IR Steel quoted, “Iran’s billet market was affected by two factors:
1- Cold and snowy weather which declined transport of billet
2- Supply of scrap and its price
In the current situation, price of scrap is not in line with billet price. Besides, supply of scrap is limited due to cold season. It is common all over the world that during recession time, due to lower construction activities, scrap supply decline. Besides, mills which produce billet by using DRI were faced with limited demand during last week which is another sign for long products market depressed sentiment. DRI base price was USD 151-156 /mt ex-work excluding VAT and buyers were not interested.
| Commodities | 12/1/2019 | 13/1/2019 | 14/1/2019 | 15/1/2019 | 16/1/2019 | 17/1/2019 |
| Scrap | 26,450 | 26,870 | 26,870 | 26,900 | 26,900 | 26,950 |
| Billet | 30,500 | 30,550 | 30,550 | 30,650 | 30,650 | 30,600 |
| Rebar | 35,600 | 35,550 | 35,500 | 35,480 | 35,460 | 35,440 |
| Difference between Scrap-Billet | 4,050 | 3,680 | 3,680 | 3,750 | 3,750 | 3,650 |
| Difference between Billet-Rebar | 5,100 | 5,000 | 4,950 | 4,830 | 4,810 | 4,840 |
Unit: IRR/KG
1 USD = IRR 82,523
Source: Planner
During last week, scrap offers in Iranian domestic market was noted to be around IRR 26,450 – 26,950/KG (USD 321-327/MT). Domestic rebar offers were ranged from IRR 35,440 – 35,600/KG (USD 429-431/MT).
South Kaveh Steel Company Offered Billet in IME
South Kaveh Steel Company offered 20,000 MT billet on 15 Jan’19 and sold 10,000 MT 5SP billet owing to low demand in IME at IRR 28,625/KG (USD 346.87/MT) excluding 9% VAT against the demand of 10,000 MT.
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