Long products market started week 49 with an optimistic trend but by middle of the week it changed to market depression with no activity.
Domestic mills were faced with no interest in buying at IME as their final prices were higher by IRR 300,000 per tonne compared to offers at retail market.
Some market participants believe that debar base price should drop to IRR 15,000,000 per tonne despite current IRR 16,500,000 per tonne . But it means that domestic billet price should be by IRR 2,000 per tonne lower at IRR 13,000,000 per tonne which means import price should decline to USD 470 per tonne CFR Northern ports.
It is unlikely that in coming months prices will reach this level as last quarter of each year, long products market activities increase and supply level in global market is limited in January. As a results some views believe that bottom price for sections should be IRR 17,500,000 to IRR 18,000,000 per tonne.
If exrate stays stable and big mills resist against any drop in prices, Iran long products market will be balanced in coming 2 weeks. At the moment any small change in ex-rate affects steel market severely and directly.