Domestic billet size 125 mm improved from USD 372-378 /mt to USD 383-386/mt ex-work including 9% VAT. Size 150 mm also surged from USD 383-388/mt to USD 401 /mt.
At the end of the week supply level was still limited and sellers were not eager to deal.
On Wednesday, Khouzestan Steel co offered its billet at IME ( Iran Mercantile Exchange) at base price of USD 380 /mt ex-work excluding VAT. There was no buyer for it. Latest offer of the mill at IME was around a month ago at base price of USD 359/mt. Therefore the difference between these two base price offers would be USD 21 /mt which is 6%. The reason behind this surge in price is DRI price increase around USD 10.5 /mt during last month.
Absence of Khouzestan Steel co as a market leader in IME has made market participants confused. Some says this is an alarm to make market ready for new prices. Some others say domestic market needed this increase to reduce the gap with Khouzestan Steel co export offers. Meanwhile some others believe DRI price rise has made billet price up. Any way market insiders believe this upward trend was necessary after around a year depression. But any reason behind the upward trend, it doesn’t mean market is active and strong. It was just a move in price.
DRI producers may go to summer maintenances for a month, which will make billet supply level limited during the summer. Some insiders believe Iran billet export level will decline due to summer holidays around the world and lower demand, therefore mills will increase domestic supply. If this happen it may make prices lower. But generally Iranian mills are finding their share in global markets and export level is rising.
Source: IFNAA News Agency