Business And Markets

Steel in Turbulent Territory

Steel in  Turbulent Territory
Steel in  Turbulent Territory

Fluctuations in the dollar exchange rate during the past few days gave the traders no choice but to wait and see what is going to happen in the future.

Steel ingots got slightly more expensive last week which led to more demand for the product, but the market got a deep shock after the prices dropped again.  Billet prices were constant during the past week when 150-millimeter billet was traded at 17,000 rials ($0.64) per kilogram while the 120-mm billet’s price stood at 16300 rials ($0.61) with very few trades, reported Foolad News.

Market experts say the ingot price is expected to fall because of low demands. They say the competition by the Chinese has disturbed the market in Persian Gulf countries, causing the prices to be as low as $505 CFR at Persian Gulf ports.

Iron bar prices were down due to a remarkable decrease in demand which is expected to continue for the week ahead.

Iron rods’ prices did not change during the past week and some of the producers even stopped production because the prices equaled the finished cost.

 There is a general pessimism in the market for steel and no one is willing to invest due to a vague future of the market. The manufacturers are currently producing steel sections on minimum capacity and there is no more room to reduce production.

Based on the Fifth Five-year Economic Development Plan (2011-2015), steel production should reach 55 million tons per annum, which is unlikely to materialize regarding the current production level, which hardly reaches 20 million tons per year.