Weekly report of steel markets – Report of the week 18 of 2020
At the end of last week, the price of imported iron ore in China did not change much compared to the previous week, and about $ 83.95 per ton of dry CFR was recorded. Ambiguity in the steel market and the profit margins of factories have overshadowed the purchase of iron ore.
In Iran’s export market, the latest price of Magnetite Pure Iron Ore fell 61 percent last week from $ 49.4 to $ 47.6 per ton FOB. Iran’s iron ore export hematite of 61% purity also fell by about $ 2, $ 44.5 per ton FOB.
Prices have fallen in the past week with the closure of new transactions in the Turkish scrap market. Europe’s heavy scrap fell about $ 20 in two weeks, trading at $ 230. US heavy scrap also rose from about $ 257 last week to $ 240 per tonne CFR.
Last week, Japan’s Class 2 heavy-duty export scrap was recorded at $ 200 a tonne FOB. The average price of imported scrap in East Asia also remained unchanged at $ 250 per tonne CFR.
In the US domestic market, crushed scrap rose $ 2 to $ 238 per Long Tone.
Last week, the suppliers of billet CIS lowered prices to attract customers’ attention, and transactions in the Middle East were finalized. Most bids were $ 340 to $ 345 per tonne FOB, up from $ 350 to $ 365 last week.
China bought a ton of CFRs from the CIS billet for $ 370. While last week the purchase price from other countries in China was up to $ 380 per ton CFR.
Turkey’s export billet was $ 370 to $ 380 per ton FOB and stable. In Southeast Asia, imported billets were recorded at $ 365 to $ 370 per tonne CFR, down $ 5 a week.
Billet in the Iranian market
The price of ingots decreased last week. The average price of ingots on Saturday was 53667 Rials, which reached 52433 Rials by Wednesday. The decline in the price of ingots is due to two main factors:
The first factor is the stagnation of demand in the cross-sectional sector
The second factor is the government’s insistence on controlling the price of ingots and sections in the commodity exchange
The downward trend in prices has caused the price of sponge iron to fall to 27,000 to 28,000 rials, depending on the factory. Since ingots are the key commodity in the steel market, it is very important for the government to pay attention to them. The government is trying to control inflation, which is why it does not allow the price of ingots on the stock exchange to exceed 45,000 rials per kilogram of base. The control of the price of round bars on the stock exchange at the ceiling of 52,000 Rials and the beam at the ceiling of 54,000 Rials is based on the same policy, but the current situation is subject to the conditions of the global market. Falling oil prices will lead to very serious economic problems if steel demand in the world is declining and prices are declining. In this case, it will not be necessary to continue the policy of the Ministry of Silence, but if the power of suppressed demand in the market increases, the price in the world market will increase. In any case, since steel must import foreign currency into the country, the intervention of the Ministry of Silence will continue until our balance of payments is resilient, if the resulting foreign exchange volume is less than the government needs, exports will be free and of course that price. The interior will rise. It should not be forgotten that steel has a significant role in the stock market. The intervention of the Ministry of Silence will affect the balance of steel companies, and this is the best excuse to put pressure on the ministry to change its policies. What is certain is that the price of ingots on the metal exchange has reached its peak and has no resemblance to the ingots offered outside the stock market, so the current trend cannot be sustained.
Last week in the Turkish rebar export market, the negative atmosphere of the scrap market allowed suppliers to reduce prices, but buyers were still looking for lower prices. Turkey’s export rebar has fallen by about $ 8 to $ 400 a tonne fob. In the domestic market, the price ranged from $ 410 to $ 415 to $ 400 to $ 405. The CIS export rebar was recorded at $ 370 to $ 400 per ton FOB, which was unchanged from the previous week.
In the European domestic market, rebar rose from 470 euros to 458 euros per tonne. In the US market, rebar remained at $ 603 per tonne last week.
Sections in the Iranian market
The average price of a round bar on Saturday was 62740 Rials, which reached 61391 Rials by Wednesday. The average price of 14 to 18 size beams in Isfahan was 73333 Rials, which reached 70,500 Rials by Wednesday. The main reason for the decrease in prices is the control of prices in the metals exchange and forcing all factories to supply their round bars at the price ceiling set by the stock exchange. On the other hand, the stagnation of demand as well as the anorexia of Ramadan have been further exacerbated. In general, the market conditions are such that prices want to peak, but the government has pulled the brakes to the end. Last week, we saw that the supply of parts to the market was limited, and many factories spent a few days delivering the order they received, while they had already received the goods. This means a reduction in the inventory of depot sections in factories, so any change in the price of sponge iron or ingots will spread quickly and multiplier to the cross-sectional market.
CIS hot-rolled export sheet fell by $ 5 last week, $ 360 to $ 370 per ton FOB was recorded, although buyers demanded more discounts depending on the market situation. There was no market activity and buyers in Turkey did not ask for more than $ 350 per ton FOB.
In China, despite falling prices, the export market was still in recession. The latest offers were $ 410 to $ 420 per ton FOB, down $ 5 from a week earlier. Of course, the current market price was lower. South Korea bought hot sheets from China at $ 400 per ton CFR and Vietnam at $ 405 to $ 408 per ton CFR.
In the European domestic market, hot-rolled sheets were priced at 8 euros, 442 euros per tonne. In the US market, hot-rolled sheets fell from $ 474 to $ 460 per tonne.
Sheets in the Iranian market
The price of 2 mm thick hot sheet on Saturday was 79,000 Rials, which reached about 80,000 Rials by the end of the week. Hot sheets with a thickness of 3 to 15 mm were priced at an average price of 90938 Rials on Saturday, which reached 88375 Rials on Wednesday. Last week, the Ministry of Silence also cut off Mobarakeh’s ear and canceled Group C’s paper transactions. In fact, it was a warning to Mobarakeh and his entourage to better assess the situation, although weak demand was a factor in the decline. It should not be forgotten that the export of pipes and profiles has sharply decreased, and this will seriously affect the demand for Mobarakeh sheets in the country. However, there is no hope of improving foreign markets in the short term. Auxin sheets with a thickness of 10 to 40 mm had an average price of 105563 Rials on Saturday, which dropped to 102375 Rials by Wednesday. The supply of Auxin products has not changed much, but the decrease in its price is due to the decline in demand. Late this week, some of the thicknesses of the ST-37 quality whispered the price increase, but the sound of this instrument will rise in the coming days, depending on the reaction of the market.
Cold sheet on Saturday for the thickness of 0.40 to 2.5 mm had a price of 132636 Rials, which increased to 136444 Rials by Wednesday. The relative improvement in the price of this commodity in the stock market is due to the limited supply, not the improvement in demand, because its demand remains closed, especially in the home appliance sector.
Galvanized sheet decreased from the average price of 128020 Rials to 127600 Rials. The reason for this was the drop in the price of hot rolled sheets. In the coming weeks, if it is not accompanied by specific decisions, the market will be driven by the same prices, otherwise there is no way forward for steel prices except for the increase, because exports will open. Demand will rise after the market opens, and capital flight to the stock market will fade.
The leap year of production coincides with the government’s controlling policies that lead to declining production. Of course, corona and sanctions are the two main causes, but increasing production means increasing investment volume and flowing goods and capital. The government to avoid Inflation follows a policy of price control and the rotation of goods and capital. The continuation of this situation will not lead to an increase in production.