Long products prices were downward and debar price dropped by around IRR 200,000 per metric tonne during last week. Market participants expect IRR 500,000 per metric tonne more reduction in debar price in near future as demand is scarce and billet price is reducing.
As billet was sold at base price of IRR 14.05 million per metric tonne, debar base price should be IRR 15.2million per metric tonne excluding 8% VAT. But Esfahan Steel Co sold around 6400 million tonne of its debar at base price of IRR 15.7 million per metric tonne at IME during last week.
Recently debar sale price was around IRR 16.1 million metric tonne excluding VAT.
Many factors affecting production costs including energy prices and wages have increased but average price of debar is lower than a year ago. Some market participants anticipate debar average price for current Iranian Year (end at 20 March 2015) be IRR 700,000 million metric tonne to 1 million metric tonne lower than average price of last Iranian year. This statistics are no good news for producers with heavy bank loans.
Some steel mills are looking for ways to increase export level to Iraq, but they need government support to compete with Ukrainian and Chinese products in the future.
Source – Irsteel
Zhejiang Yaang Pipe Industry Co., Limited