Iran Steel: With rising tensions between the United States and China, the price of imported pure iron ore fell 62 percent last week to $ 3, reaching $ 108 per ton CFR. Of course, given the high demand in China, this price drop had a positive effect on the volume of purchases.
On the other hand, the high supply of iron ore market has put more pressure. China’s port iron ore inventories rose to 3 million tonnes last week.
In the Iranian export market, the latest price of 61% pure magnetite iron ore was about $ 66 and 61% pure Iranian hematite iron ore was about $ 64 per ton FOB.
Iran Steel: Last week, the average price of 20-80 heavy imported scrap in Turkey increased to $ 10, and $ 270 per ton CFR was recorded. The price of steel products in Turkey is growing faster than the price of scrap, so some US suppliers were looking for $ 275 per ton CFR.
Japan’s Class 2 heavy export scrap improved by $ 7 to $ 224 per tonne FOB. The average price of heavy imported scrap in East Asia rose $ 10 to $ 267 per tonne CFR. In the US domestic market, shredded scrap of $ 235 per tonne remained unchanged.
Iran Steel: Last week in the Turkish billet market there was a significant price increase due to the growth of the scrap market. Of course, the Turkish domestic market is active and the import and export markets are silent. Billets rose $ 5 to $ 10 in the domestic market, reaching $ 405 to $ 410 per tonne.
Billet CIS rose $ 5 to $ 10 in Turkey, reaching $ 400 to $ 405 per tonne CFR, but the highest asking price was $ 390 per tonne CFR.
In Asia, China remained the largest buyer of billets, but demand is likely to ease slightly, given rising tensions between the United States and China and falling futures markets. The last Chinese purchase for Russian billet was $ 412 per ton CFR, and Indonesian billet was bought at $ 425 per ton CFR. Billet fell to $ 3 in Chinese futures markets.
Last week, prices in the Southeast Asian billet import market rose from $ 405 to $ 410 to $ 420 per tonne CFR.
Billets in the Iranian market
Iran Steel: On Saturday, the price of ingots was 103038 Rials. With the exchange rate falling on Monday, the market collapsed. Everyone was waiting for the supply of ingots in the commodity exchange on Tuesday, but due to the lack of supply of ingots in the commodity exchange, the market went its own way. All eyes were on the stock market on Wednesday. On Wednesday, the price of ingots reached 91563 Rials, while some ingot production units offered less than 90,000 Rials per kilo. Meanwhile, the supply of sponge iron is still facing problems, but the decrease in the price of ingots stopped trading and this helped lower the price of sponge iron, so much so that the middle product with a base price of 49,500 rials was heard, which is at least 1,000 compared to last week. Rials show a decrease. With the fall of the dollar price from 26000 Tomans to 22000 Tomans, the market went into a coma, but on the other hand, last week the quarterly performance of steelmakers was announced and their meetings were either held or are being held. Steel production and export statistics in the last 99 weeks were announced شد. Accordingly, exports of sponge iron decreased by 91%, ingots by 7%, slabs by 61% and other steel products by 49%. The largest decrease in exports is in sponge iron, while the production of sponge iron in the quarter increased by 99% and reached more than 8 million tons. Therefore, despite the increase in the production of sponge iron and the decrease in exports along with the decline in domestic demand, we have seen an increase in prices over the past three months. What is very significant among the announced statistics And sheet. The production of Khuzestan steel ingots has sharply decreased. Sponge iron is in a worse situation. In the first quarter of 1998, Khuzestan Steel produced 3.721 million tons, while in the first quarter, it produced 99.005 million tons. Therefore, Khuzestan Steel faced a decline in production, while the company’s net profit grew by 5%. Marks. The same is true for Mobarakeh Steel. According to the data of Mobarakeh Steel, the production of this factory has covered 27% of the program. In fact, Mobarakeh Steel is more than 70% behind its production plan, according to the statistics published by Mobarakeh Steel. Slab production of 70% hot plate is 73% and cold plate production is 75% of the rear production program.
The decrease in the price of currency helped to lower the price of round bars in the domestic market, but this issue disrupts the relationship between steel exports, because as the price of currency decreases, the rial receipt of the exporter of round bars decreases.
There are two glances in the market:
At first glance, the stronger one expects prices to fall slightly and remain at the same level. The group argues that the exchange rate is falling and demand is falling, both in the domestic market and for exports. This view is based more on the government’s behavior curve over the past years. The group believes that prices will return, but the period will require a one-month break. In fact, they believe in a U-shaped market reform.
The second view believes that the depreciation of the exchange rate on the one hand will lead to a rapid decline in exports, as a result of which the exchange rate will rise again, and this will quickly push the market upwards. V-shaped market correction
Both groups agree on the following:
First, the shortage of raw materials due to production difficulties
Second, the need for exports, especially in the middle steel sector
Third, the very low efficiency of capacities in the final product sector
Fourth, the increasing trend of monetary base volume
Fifth, the need for the profitability of the steel industry to maintain the stock market
Therefore, the return of prices is quite justifiable according to the above, it is only a matter of time.
Last week, two major events took place in the commodity exchange market. First, buyers had to deposit 50% of their demand in advance to the broker’s account.
Second, the supply will stop on Tuesday, so the ingot producers will supply their ingots next week to solve the liquidity problem, but after that, the volume of ingot supply will be dependent on the supply of sponge iron and scrap during the last month, when sponge iron is limited. Faced with supply, some ingot producers have turned to the waste market, and this has led to an increase in the price of waste up to 7000 Tomans per kilo of factory door delivery to the buyer. With the decrease in the price of ingots, the price of waste also went down, but as the production of ingots increases, the price of waste will rise again in the coming weeks.
The market is well aware of the oscillations because it has experienced it many times, so the argument that prices will return is quite reasonable, especially since a fall in market prices will cause the stock price to fall, and steel producers, who are also highly regarded by the government. They do not like it, but the tense days of the past month are not really in anyone’s interest.
Iran Steel: By the end of last week, CIS export rebar had improved from $ 410 to $ 415 to $ 420 to $ 430 per ton FOB. In Turkey, rising rebar scrap prices have risen. The export bid rose $ 10 to $ 430 to $ 435 per tonne fob. In the domestic market, rebar grew to $ 15, and $ 435 to $ 440 per tonne was heard at the factory door.
In Southeast Asia, imported rebar remained unchanged at $ 425 per tonne CFR. In China, the price of export rebar rose by $ 5 to $ 470 per tonne fob. By the end of the week, however, rising tensions with the United States had pushed up Chinese rebar futures to $ 8.
In the European domestic market, rebar was 438 euros per ton of factory door and stable. In the US market, rebar remained unchanged at $ 565 per ton of shorts.
Sections in the Iranian market
Iran Steel: The average price of rebar on Saturday was 110429 Rials, reached its peak on Sunday and hit a record 114167 Rials, but after that the price of round bars began to decline until Wednesday to 103000 Rials per kilogram of the market was closed. Isfahan, which averaged 141900 Rials on Saturday, reached 143667 Rials on Sunday, but then started to decline and decreased to 132833 Rials. Beam was announced very late on Wednesday, but the volume of purchases of each buyer in the commodity exchange decreased sharply, so the commodity exchange gave the market the signal that firstly do not expect the price of ingots to decrease and secondly that the government manages the cross-market . The most important signal that has been given to the market and is now visible to everyone is that steel control is in the hands of the government and the market acts only as a hotbed. What is seen in market prices is the result of government decisions and behaviors. Its construction costs have been reduced to a minimum, and in the last year of Mr. Rouhani’s presidency, he has not lost money in the budget due to the decrease in steel prices, so he does not have a significant share in government spending. Government revenues will be reduced. Therefore, at the macro level, falling steel prices to the extent that it does not disrupt the export relationship is not an obstacle in the eyes of the government. The government’s solution is to limit domestic demand and help exports. Raising the price of foreign exchange In recent weeks, we have seen that the supply of foreign exchange for many goods has stopped and the import of cosmetics has been banned.
Iran Steel: CIS hot-rolled sheet exports last week were $ 400 to $ 415 per tonne FOB. Hot imported sheets in Turkey increased from $ 405 to $ 425 to $ 415 to $ 425 per ton CFR.
China’s average export price of hot-rolled sheet rose $ 10 to $ 478 per tonne fob. Imported hot rolled sheets in Southeast Asia improved from $ 440 to $ 443 to $ 450 to $ 455 per tonne CFR.
In the European domestic market, hot rolled sheet was improved by 4 euros, recording 405 euros per ton of factory doors. In the US market, hot-rolled sheet dropped $ 3 to $ 456 per tonne at the factory door.
Sheets in the Iranian market
Iran Steel: The price of 2 mm thick hot rolled sheet was 181,000 Rials in Isfahan on Saturday and 165,000 Rials in Ahvaz and reached 155,000 Rials in Isfahan on Wednesday. Hot sheets with a thickness of 3 to 15 mm of Mobarakeh product, which was priced at 152063 Rials on Saturday, decreased to 133625 Rials on Wednesday. Price drop was also seen for Auxin products with a thickness of 10 to 40 mm and the average price increased from 166,500 Rials to 153,000 Rials, while the limited supply of auxin maintained the price reduction ratio of Auxin compared to Mobarakeh Steel. Kavian Steel only for three sizes 15 to 25 Mm was offered, the average of which was 137667 Rials on Saturday, but it dropped to 135000 Rials by Wednesday.
Cold sheet thickness of 0.40 to 2.5 was 228545 Rials on Saturday, but dropped to 216000 Rials by Wednesday. This trend was also seen in the case of galvanized sheet and decreased from 237325 Rials on Saturday to 226325 Rials. The downward trend in prices is only due to the prevailing psychological atmosphere in the market and there is no other reason for it. The paper was also unveiled on the stock exchange on Wednesday afternoon. Accordingly, the factories that receive slabs are obliged to list their sheets in the stock market, because these units are very different from each other in terms of structure and on the other hand, they have problems in terms of financial statements, and this does not allow them. To offer their product directly on the commodity exchange, they should look for a solution to sell their sheet through the slab supplier. Understanding the two factories is simply not possible as many sheet rolling mills rely on private sector capital. Their dependence on companies such as Mobarakeh Steel and Khuzestan Steel will increase government interference in the steel market.
In the future, we will see that collections that have a good relationship with the upstream factories will benefit as much as we have seen in the Auxin experience over the past year, but other factories will suffer. On the other hand, the market for galvanized sheets, pipes and profiles will be in disarray in the coming weeks because their raw materials are no longer supplied through traditional means and they have to look for new methods.
Source : Iran Steel News Website