Analysis of steel billet prices on the Iran commodity exchange

Analysis of the recent market dynamics on the Iran Commodity Exchange reveals a fluctuating pattern in steel billet prices. While there had been a consistent downward trend in recent weeks, the current week has seen a departure from this trajectory, witnessing a marginal increase in the sales prices of billet.

Within the housing sector, a palpable state of stagnation is apparent. Construction activities have notably dwindled since the commencement of April 2023 compared to the previous year. Consequently, the demand for steel products, especially rebar, has taken a downturn.

Notably, rolling mills, recognized as significant consumers of billet in the commodity exchange, are grappling with a decrease in rebar consumption in the market. This decline in demand for billet is particularly evident in long-section manufacturing facilities, leading to a gradual decrease in overall demand since the beginning of the current year.

Examining the economic feasibility, the base price of 18 thousand tomans per kilogram for billet appears unattractive to producers of long sections. Consequently, there is a noticeable lack of enthusiasm among these producers for acquiring billet at the present pricing.

Considering the broader implications, the decrease in rebar prices within the physical market could potentially alleviate the challenges faced by the steel sector. This adjustment may bring about a relative balance between the final price of rebar and the associated raw material costs, providing a semblance of equilibrium in the market.

In conclusion, the present condition of the physical market for billet on the Iran Commodity Exchange underscores a situation characterized by fluctuations and shifts in pricing trends.The challenges faced by the realstate sector and the decreasing demand in long-section manufacturing facilities pose significant considerations for industry stakeholders. The potential impact of a decrease in rebar prices on the overall steel sector adds a layer of complexity to the ongoing market dynamics.