Iran steel billet market trend in week 27 2017

Billet price was upward in a fast pace during last week in Iran. Market participants were confused. Upward price of DRI and increasing demand of Fareast customers as main export destination of Iran’s billet were main reasons behind this trend.


nalysts explain this upward trend due to:

1- Limited DRI supply level which led to production cuts at many mills.

2- Higher scrap price and its supply shortage

3- Limited billet inventory of Re-rollers

4- Higher billet and iron ore price in China, which made Iran steel products demand increase in other destinations. Iranian billet exporters increased their offer price up to USD410/mt fob Iranian ports.

5- Confusion of customers at IME with no clear trend, which made market sentiment upward.

During last week DRI supply shortage increased as some traders increased prices up to USD 211 /mt. It is summer maintenance time at some production lines, besides, hot weather and power cuts at some other mills led to more production cuts of DRI. Besides probable annual maintenance of Chadormalou Mining co and possible pellet shortage also affected market upward sentiment.

Besides, upward trend of DRI has forced billet producers interested in scrap purchase which made scrap price also upward in the traditional season of lower scrap supply. Higher Chinese billet in Far-east import market, has led to higher demand for Iranian billet and slab. Therefore, Iranian leader mills focused more on export. This pressured domestic market.

Khouzestan Steel co increased its billet base price at IME by USD 22 /mt compared to a week ago. But the offer didn’t lead to any deal at IME.  Actually billet base price at IME has increased by USD 44 /mt within a month. Therefore, base price of DRI won’t be lower than USD 195 /mt. The billet offer at IME didn’t finalized and just made market confused.

Some news was heard about establishment of two pellet production lines in coming 2 months with 10 million tones annual capacity. If so, DRI production capacity would rise to more than 20 million tones. Besides, summer holidays in July and August would make billet trade quiet in global markets when Iranian mills are in maintenance stoppages too. Therefore, we can say current market trend won’t last long and is not an indicator of future trend.

Market insiders believe base price of USD359 -370 /mt ex-work excluding VAT would be logical for billet at IME. With higher DRI production, billet price would come back to this level. Current surges of billet price has made re-rollers stay back and decline purchases to immediate needs level. This would help market prices move back.


Source: IFNAA News Agency

Publuish Date : 2017/07/13