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World Steel News (10th week in summarization)

Scrap prices drop in all contracts in Turkey

Turkey / Scrap

Turkish companies keep contracting import scrap. A price decrease has become obvious by week’s end after exporters from the USA, Baltic region and Europe backed down.

Some suppliers have managed to make deals with Iskenderun mills thanks to more flexible pricing policy among other factors. In particular, a mixed lot of US scrap was marketed at $260/t CFR. In this contract, HMS 1&2 (80:20) was priced at $256.5/t CFR, while yesterday similar grade reportedly changed hands at $258.5/t CFR, Metal Expert estimates.

The only integrated steel mill in Iskenderun has chosen to buy from a Russian scrap collector (St. Petersburg) asking $256/t CFR for HMS 1&2 (80:20), $5/t lower than in the latest transaction on the route. The material will be shipped in April, Metal Expert learns. “Russian scrap exporters can give discounts with practically no harm to their margins because of rouble depreciation against the dollar,” industry insiders note.

Another Turkish steelmaker has booked HMS 1&2 (80:20) from Germany at $255/t CFR against $262/t CFR paid for European analogue previously.

Turkey: contract prices for scrap, $/t CFR

Country

Volume, t

Grade

Price

USA

10,000

HMS 1&2 (80:20)

260*

30,000

Shredded

Russia (Baltic region)

20,500

HMS 1&2 (80:20)

256

2,000

P&S

266

Germany

25,000

HMS 1&2 (80:20)

255

* – average price

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Demand upturn drives domestic scrap prices up in Turkey

Turkey / Scrap

Domestic scrap prices have increased in Turkey on the back of better demand.

This week, some Turkish mills have raised purchase prices by TRY 30-75/t ($12-29/t at current exchange rate) to improve scrap inflow to their sites. Buying upturn is related to growing steel output in the country. “Scrap demand has improved. For example, we [Cemtas] have resumed operations,” a mill source commented. Besides, import scrap prices have risen in Turkey this month.

Kardemir has revised purchase prices for domestic scrap for the third time since the start of March. This time prices have added TRY 30/t ($12/t), while since late February the increase has reached TRY 105/t ($40/t).

Turkey: mills' buying prices for scrap

(delivered; $1 = TRY 2.5936; without 18% VAT)

Company/ grade

9-11.02.2015

Change

$/t

TRY/t

$/t

TRY/t

Colakoglu

bonus grade

247

640

+27

+70

extra grade

245

635

+27

+70

Asil Celik

bonus grade

260

675

+29

+75

extra grade

256

665

+27

+70

Cemtas

bonus grade

239

620

+27

+70

extra grade

227

590

+27

+70

Kardemir

bonus grade

303

785

+12

+30

extra grade

299

775

+12

+30

Erdemir

bonus grade

272

705

+23

+60

extra grade

270

700

+25

+65

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Export prices for Turkish longs stabilize temporarily due to scrap market divergency

Turkey / Long products

Turkish steel exporters have not maintained upward trend amid thin buying, as it was expected. However, they are declining to lower prices due to another import scrap prices upturn in most new contracts.

Export prices for April rebar from Turkey are still hovering at last week's $440-450/t FOB. Most buyers refrain from negotiating on the back of uncertain market outlook. Only a few of them have agreed to sign contracts to restock. Specifically, Egyptian traders have booked around 10,000 t of rebar at $450/t FOB Iskenderun early April shipment. Demand from Iraq has rallied too – around 20,000 t of Turkish rebar has been booked there since the beginning of the month at $455/t EXW on average.

Offers to UAE are coming at $445/t CFR TW (some $440/t FOB). So far local traders choose to hold on with deals and study the situation more carefully instead. Meanwhile, late last week Turkish suppliers managed to sell a large parcel of rebar to UAE at $440-445/t CFR TW.

North American buyers have the same attitude. Price idea for this region is at $450-455/t FOB ($460-465/t CFR TW) now, $10/t above February sales.

Turkish mills are expected to hold prices steady until end-month, citing “previous bookings of more expensive scrap and seasonal domestic demand rebound in early spring”. However, small discounts may be granted under deals with major buyers.

Mesh-quality wire rod is quoted to foreign markets at $450-460/t FOB, like in early March. Some suppliers are offering their material as high as $465/t FOB, taking into account domestic sales.

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Domestic market situation in Turkey makes further rebar price increase questionable

Turkey / Long products

Longs prices have increased in Turkey compared to end-February amid higher import scrap and square billet deals prices as well as firmer demand upon the start of construction season. That, however, was insufficient to support rebar quotes growth.

Over two weeks Turkish domestic rebar prices have gained $6-12/t (TRY 80-100/t at the current exchange rate), reaching $437-453/t (TRY 1,360-1,410/t) EXW depending on the region. Buying is moderate as customers have restocked earlier, besides currency exchange market is unstable. “Producers can not maintain upward trend as demand is modest now,” one Turkish trader told Metal Expert. Nevertheless, a deal on medium-sized rebar batch in Marmara region and several more in Iskenderun have been reported to Metal Expert, all signed within the regional price range. Some producers in Iskenderun have been reported to close sales above the upper end of the range.

Taking into account the current situation and uncertainty in the scrap and semis segments outlook, no major changes will happen in the rebar market soon, most market players believe.

Turkey: domestic prices for rebar, $/t (TRY/t)

Product/region

Offer

Two-week change

General range

437-453 (1,360-1,410)

+6-12 (+80-100)

Iskenderun

437-441 (1,360-1,370)

+6-10 (+80-90)

Izmir

444-447 (1,380-1,390)

+9-10 (+90)

Marmara

450-453 (1,400-1,410)

+12 (+100)

Note: prices in lira terms are given with 18% VAT, in dollars – without it. The exchange rate is $1 = TRY 2.635.

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Turkish mills slow to import square billet on contradictory scrap sentiment

Turkey / Steel Semis

Turkish buyers remain hardly interested in import billet purchases due to contradictory sentiment in the import scrap segment. In the circumstances, CIS semis suppliers have refrained from lifting prices again to Turkey.

Current CIS square billet offers for April shipment to Turkey are made at the level of early March – $370-380/t CFR. Expecting import scrap prices would roll back soon, most buyers agree to book at no more than $360-365/t CFR. “Looks like this time Turkey prefers to buy bigger scrap tonnages instead of significant CIS billet bookings. Maybe they will turn to CIS semis when the market starts to show signs of weakening”, a large Turkish trader commented to Metal Expert. Just some consumers that needed to restock agreed to sign contracts at $370/t CFR. A deal for European material has been concluded $5/t higher, market players inform.

Turkish mills have raised domestic offers by $5/t from the lower end of the price range to $390-400/t EXW. A supplier in Marmara region has managed to sell about 10,000 t at $395/t EXW. Buyers in Iskenderun region have not accepted a $400/t EXW level.

Market participants mostly agree that no further upward price moves from both Turkish mills and CIS billet suppliers will be observed in the short term. Buyers have not largely supported the increase, besides “some import scrap quotes softening is possible soon”.

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Pessimistic sentiment lends no support to bullish moves of Turkish HRC makers

Turkey / Flat Products

Turkish mills keep pushing up domestic offers of HR coils, referring to increased prices for import scrap and successful sales of March-April production. Yet, despite firm demand from consuming industries, Turkish buyers are reluctant to make deals at the new price level.

Mills' domestic prices for HRC have risen $10/t to $440-460/t EXW/FCA (all prices are without 18% VAT) over two weeks. Specifically, Colakoglu Metalurji quotes similar levels for April production. Erdemir Group is already offering May production at around $445-450/t EXW/FCA. Habas has been heard to sell a mixed batch at $450/t CFR Dilovasi. Market players say prices will roll back to $420-430/t EXW soon, citing a downtrend in iron ore segment and euro depreciation hindering exports of Turkish coils. “Turkish mills don't have enough reasons for price hikes. Despite more expensive import scrap, the sentiment in flats segment continues to be pessimistic. Plus it is hard to increase dollar prices for local market in view of significant lira devaluation,” one of customers comments.

Most traders are quoting HR sheet at $485-495/t ex-warehouse, demand is moderate.

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Russia’s MMK keeps April flats prices to Turkey almost unchanged due to unfavourable market

Turkey / Flat Products

Russia’s MMK has opened April HRC and CRC sales in the Turkish market keeping prices largely unchanged. The reasons for such move are slack demand for steel products and negative buyers’ expectation of iron ore segment development.

Currently MMK's small coils (9-13 t) are available for Turkish customers at $405/t CFR, the big ones (18 t) – at $415/t CFR, which is about the same as the seller's quotes of HRC of March production.

MMK's CR coils are being offered to Turkey at $485/t CFR, while sales of March material have been closed within the range of $485-500/t CFR.

However, supplier will be forced to come to terms with buyers and at least cut prices. "Despite some upward trend in scrap segment, the sentiment in iron ore market is rather pessimistic. It is possible that foreign buyers will be able to push for some discounts," a trader told Metal Expert.

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Domestic HDG prices soften in Turkey, HRC stable

Turkey / Flat Products

Although local HRC prices have been relatively stable over the past few weeks, HDG prices have slightly softened due to modest buying activity against the backdrop of bearish expectations in the iron ore market. At the same time, end-user demand is satisfying and is expected to remain stable due to high season.

The upper end of prices for 0.5 mm HDG with 100 g/sq m zinc coating has lost around $10/t from over a half-month period, the range coming to $650-690/t EXW, depending on mill. All prices are without 18% VAT. However, mills that need to sell urgently may offer $640/t EXW, market players told Metal Expert.

Local buyers are not enthusiastic now to purchase much as most of them believe prices will slide further. "The sharp drop of lira and forecasts of iron ore price decrease give good grounds to think that downward trend in HDG market will continue. So we prefer to wait and see," a source told Metal Expert.

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Turkey hikes iron ore imports in January due to BF launch at Kardemir

Turkey / Iron Ore

Turkey considerably raised iron ore imports in January due to commissioning of a new blast furnace at Kardemir.

In late 2014 – early 2015 the company launched 1.2 million tpy BF No. 5. If run at full capacity, the new unit in estimated to consume some 1.8 million t of iron ore per year. Capacity expansion has resulted in higher iron ore requirement, and since domestic availability of the material is limited, its imports jumped early this year. Thus, according to Turkish Statistical Institute (TUIK), in January imports rose by 64% y-o-y to 831,200 t. Brazil raised its shipments to Turkey the most – by 2.7 times to 456,300 t.

According to Metal Expert data, to keep its new BF running Kardemir is planning to use 60% of sinter and 40% of pellets. It plans to produce sinter from iron ore fines, of which 25% is now imported from Brazil, the rest purchased from domestic market. In future this pattern may change. “In the future we’ll probably start importing from other countries too,” a well-informed source said. The entire amount of pellets is bought from Russia as Turkey does not produce this material.

Kardemir is operating four more blast furnaces with total capacity of 1.85 million tpy.

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Turkey's Ege Celik postpones square billet capacity expansion amid dull global semis market

Turkey / Long products

Turkey's Ege Celik has been forced to adjust its square billet capacity expansion plan after Turkish sellers lost ground in foreign markets. Besides, domestic competition is stronger now.

Square billet exports from Turkey have tended to shrink over the past several years, reducing almost tenfold from 3 million t in 2012 to 335,000 t in 2014. The decrease is blamed on development of import replacement programmes and resulting expansion of domestic steelmaking capacities in the countries that traditionally booked Turkish square billet. According to Metal Expert's data, Saudi Arabia and Iran, the main consumers of Turkish billet, ramped up square billet output by 3 million t and 3.3 million t respectively in 2012-2014. Turkish mills have thus been forced to focus on the domestic semis market, although it has provided little support, because it is difficult to raise shipments and compete with CIS suppliers.

In this complicated situation Ege Celik has decided to postpone installation of the new 1.2 million tpy EAF at its Aliaga operations in Izmir Region. Under the project the unit was to replace one of the two existing 85-tonne EAFs (2 million tpy in total) to cut expenses and increase output of crude steel for merchant semis production.

The plant's steelmaking facilities are running at 30% capacity now, a company source told Metal Expert. The producer is also equipped with a wire rod and a rebar mill (420,000 tpy and 200,000 tpy respectively). The former is running at full capacity and the latter – at 60%.

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Turkey's Kar-demir Haddecilik to increase exports after capacity expansion

Turkey / Long products

Turkey’s Kar-demir Haddecilik plans to raise longs exports thanks to rolling capacity expansion slated for May 2015.

The company has already completed 60% of the project of raising bar mill capacity from 230,000 t to 450,000 t, Kar-demir Haddecilik’s official told Metal Expert. The equipment was initially planned to come on stream in March, but the start-up was postponed till May. The company gives no comments on the delay. However, it is most likely related to sluggish market situation and lower interest in Turkish products observed in the key foreign markets, Metal Expert estimates.

The project will raise the company’s longs rolling capacity to 950,000 tpy. With higher output Kar-demir Haddecilik will have to raise billet purchases. Most of semis is sourced domestically as well as from Russia and Ukraine.

The plant is equipped with bar mill No.1 (500,000 t) which is running at 50-60% capacity now. Up to 90% of the output is sold to North Africa and South America among the key sales outlets.

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Steel pipe demand to rally in Turkey when TANAP construction starts in second half of March

Turkey / Tubes & Pipes

Construction of Trans-Anatolian Gas Pipeline, the TANAP, will foster demand for OCTG in Turkey, and domestic producers may leverage the uptick.

According to local publication Daily Sabah, the project worth $1.5 billion will be inaugurated on March 17 in Kars, the city in the northwest of Turkey. The start of such a large-scale project will foster demand for welded pipes. According to preliminary calculations, construction will require around 1.3 million t of pipes, with the material from local mills – Borusan Mannesmann, Erciyas Boru, Noksel Boru, Umran Boru-Emek Boru, and Toscelik Profil ve Sac Endustrisi – accounting for 80-85%. Baosteel Europe will supply the remaining 15-20% of the volume.

Nevertheless, Turkish pipe suppliers may have certain difficulties related to anti-dumping investigation into HRC imports. As Metal Expert reported earlier, the share of more expensive domestic bookings will increase on the back of possible import limitations. In turn, this will affect competitiveness of Turkish pipes. Nevertheless, the final decision in relation to HRC is yet to be made, and some European suppliers, ThyssenKrupp Mannex specifically, have started shipping feedstock for production of pipes used in TANAP. The German producer intends to supply 300,000 t of the material in total until early 2016.

Under the TANAP project, a 2,000 km long pipeline will be constructed in Turkey to connect the Trans Adriatic and South Caucasus Pipelines to Shah Deniz deposit in Azerbaijan. The project is slated for completion in 2018.

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Egyptian buyers slow, CIS billet booked occasionally

North Africa / Billet

The restraints related to foreign currency operations still put pressure on Egyptian buyers of square billet, thereby curbing a rise in demand for semis and longs ahead of construction season.

CIS square billet is currently available to Egyptian buyers at $390/t CFR. Meanwhile, suppliers are likely to grant small discounts when making deals because Egypt remains one of the few outlets where steady interest in import billet is registered. Nevertheless, local trading companies are reluctant to buy so far and book the material just enough to meet immediate requirements. “The market is sluggish so far, consumers only sporadically purchase small batches [of square billet] to keep stocks at sufficient level,” a market participant said. In particular, this week Metal Expert has learnt that a deal for 5,000 t of semis to be shipped in April was closed a week ago at $385/t CFR. Over the past two weeks, Egyptian traders have booked no less than 60,000-70,000 t of billet for domestic sales, although settlements are still complicated due to the imposed restrictions on hard currency accounts.

Business activity in the segment for semis and finished steel is expected to increase as a result of a large investment summit, the Egypt Economic Development Conference to be held on 13-15 March in Sharm El-Sheikh. Nevertheless, market participants doubt that billet prices will move up dramatically in the near future.

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Lebanese longs market remains slow on weak demand

Middle East / Long products

The Lebanese longs market has come to a standstill due to uncertainty in the import segment, coupled with subdued demand from traders and end-users in the context of slow construction activity and political instability in the country and the region.

As there have been no rebar deals since last week, Chinese suppliers have changed their tactics and started to cut prices. As a result, prices for Chinese rebar have lost $5-10/t over a week. Nonetheless, some market players say that offers from China have gained $10/t compared to last week. No deals have been reported at the new level as buyers wait for prices to decrease further. “The Chinese will push prices higher for a few days and then will make a cut,” a trader has commented to Metal Expert.

Quotes for Ukrainian rebar have not changed over the week, though buyers are uninterested in it because of uncompetitive prices.

Stockists’ prices have remained at the previous level over the past two weeks due to the uncertain situation in the import segment.

Lebanon: prices for long products, $/t

Market segment/product

Origin/supplier

Offer

W-o-w

Import, CFR

     

Rebar

China, from mills and traders

365-375

-5-10

Rebar

Ukraine (ArcelorMittal Kryvyi Rih), from mill

410

0

Domestic market, traders, delivered

Rebar

Import

425-455

0*

Mesh-quality wire rod

Import

425-460

0*

* – two-week change

Note: prices are without 10% VAT.

Non-alloyed steel products from non-Arab countries are subject to 5% import duty in Lebanon, except for those from Europe (2.6% duty).

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UAE traders buy big batch of Turkish rebar expecting price rise

Middle East / Long products

UAE traders purchased a large consignment of Turkish rebar late last week, anticipating an uptick in prices for import material on the back of increased scrap cost.

UAE trading companies have stricken deals for Turkish rebar at $440-445/t CFR TW, Metal Expert learns. Offer prices have not changed over the week, at $445/t CFR TW.

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Rebar prices stable in Egypt amid soft demand

North Africa / Long products

Egyptian traders are slow to buy local and import rebar due to insufficient demand from end-users and difficulties with foreign transactions.

Import rebar quotes have remained almost unchanged over the month. Chinese material to be delivered in May is offered at $405-410/t CFR, while Turkish rebar with April delivery is available at $465/t CFR. “Deals are sporadic amid steadily weak demand from the consuming industries. The situation is aggravated by a lack of currency,” a Egyptian trader noted. Nevertheless, Metal Expert has learnt from market participants about this week's deal for 10,000 t of Turkish rebar to be shipped in April.

Egyptian mills have left domestic prices unmoved. Thus, rebar is still being quoted at EGP 4,590-4,720/t ($554-570/t) EXW. “Demand has not improved much so far, though producers maintain prices amid softer competition with imports on currency problems,” a trade source commented.

Market players forecast a buying upturn in Egyptian longs market driven by the start of construction season and results of the Egypt's economic summit slated for March 13-15. “We expect the summit may promote softening of Central Bank’s policy in Egypt, so problems with steel imports will be solved. Moreover, if Egypt manages to attract additional funds, construction sector will receive some stimulus and steel consumption will also improve,” an official of a mill told Metal Expert.

Egypt: domestic prices for rebar, EXW

Supplier

Offers

$/t

EGP/t

El-Marakby

554

4,590

Solb Misr

567

4,700

Beshay

567

4,700

Ezz Steel

570

4,720

Note: * – in US dollar terms – excl. 9% tax, in Egyptian pounds – incl. taxes

Rebar is subject to 7.3% import duty in Egypt regardless of country of origin or at least EGP 290/t.

Interbank exchange rate is $1 = EGP 7.6.

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Decrease in Iranian rebar prices slows down on lower supply of billet

Middle East / Long products

At the end of Iranian year, a fall in prices for rebar and square billet has slowed down significantly in the country amid limited supply of semis in the domestic market.

Billet is available mainly from large mills now, while smaller producers prefer to minimize capacity utilization rates, market participants say. Besides, some players believe that the increase in import duties on semis (from 4% to 10%) and finished longs (from 6% to 10%) will help producers fully stabilize prices.

Over the past two weeks, domestic rebar and billet prices in terms of the national currency have slightly decreased (by IRR 46-185/kg down), while the dollar equivalent has risen by $8-13/t due to stronger rial.

In spite of approaching New Year in the country (March 21) and a lack of effective demand, some buyers have become more active and come to the market to restock, but the majority prefers to assess the situation more thoroughly. “Next round of talks over the nuclear programme will take place soon, so the outlook will become clearer,” a buyer told Metal Expert. Approximately 110,000 t of rebar and 50,000 t of square billet have been booked on the Iran Mercantile Exchange over the period under review.

Iran: long product prices, $/t (IRR/kg)

(average market rate – $1 = IRR 33,225)

Segment/product

Origin/

supplier

Price

2-week change

Domestic physical market, EXW

Rebar 14-25 mm

mills, general level

420-446 (13,935-14,815)

+13 (-46-92)

Square billet 150 mm

mills, general level

377-385 (12,500-12,778)

+8-10 (-93-185)

Iran Mercantile Exchange, EXW*

Rebar 12-32 mm

mills, general level

431-440 (14,300-14,600)

n/a

Square billet 150 mm

Khouzestan Steel

399 (13,250)

+14 (0)

* – April shipment

Note: prices exclude 8% VAT.

CBI exchange rate is $1 = IRR 27,708. Market exchange rate – $1 = IRR 33,200-33,250

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Import billet prices open window of opportunities for UAE's Hamriyah Steel

Middle East / Long products

Hamriyah Steel, a Russian-Emirati joint venture located in the UAE plans to resume rebar production expecting stronger demand for longs from the construction sector of the UAE and other Middle Eastern countries. However, favourable pricing conditions in the segment for import square billet is a more valid ground for a multitude of opportunities for the company.

In the second half of May Hamriyah Steel plans to launch a 1 million t rebar mill that was stopped in late 2012 due to the steel product market deterioration. The company plans to operate the facilities at a 50% capacity by end-2015. About 70% of manufactured volumes will be sold domestically and the remaining 30% will be exported to Saudi Arabia, Qatar and Bahrain. The issue of semis supplies to the asset is being discussed now and will be resolved by late March, a mill's representative told Metal Expert. Hamriyah Steel used to buy billet from Russia's Metalloinvest holding a majority stake in the Emirati enterprise.

The decision to resume production is largely driven by the fact that rebar manufacture from billet has become profitable again in the UAE. This is attributed to a more sizeable drop in import square billet prices as compared to the reduction of finished steel product prices over the last five months. Billet suppliers looking at the steel scrap market were holding prices within a rather high range, thereby rebar sales were less profitable for Hamriyah Steel than billet sales for Metalloinvest. However, a sharp decrease in scrap prices was reflected in prices for square billet. From October till March, square billet softened by as much as $110/t.

According to World Steel Markets (WSM), published by Metal Expert, production cost of rebar made from import billet by Hamriyah Steel shrank from $583/t to $460/t over the last six months. A minimal rebar selling price for a UAE reroller is $483/t EXW now, a 5% import duty included; this is an acceptable level taking into account $500/t EXW offers from a major rival Conares.

Hamriyah Steel has all chances to resume production and come to the market successfully because just Turkish suppliers can be its competitors and according to Metal Expert's data they are now offering rebar within $450-455 /t CFR. Turkish exporters are not too much worried about that though. “The capacity expansion in the UAE will surely have a negative impact and just lead to the sharpening of competition,” a Turkish trader commented.

Expectations regarding the rise in demand for long products in the UAE also support the company's plans. The approval of a well-balanced $13 billion budget for 2015 and a stable $0.5 billion sum for investments into infrastructure projects imply construction development and steady demand for structural steel despite the negative situation in the oil and gas sector caused by the global price fall. In its interview to a local newspaper KhaleejTimes, Conares, a maket player in the UAE, estimates domestic demand for steel products will improve by 25 % this year.

Metal Expert in WSM estimates square billet prices no longer have as much room for falling as earlier, since steel scrap prices have dropped sharply enough to restore a parity with prices for basic raw materials used in BOF steel manufacture. Quite high revenues of CIS billet suppliers because of the national currency devaluation enable them to give further discounts to the Middle Eastern rerollers, which means production cost of finished steel products may decrease and boost competitiveness of the latter. That is why, Hamriyah Steel has an opportunity to not only resume manufacture but also to grasp a foothold in the market.

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New private mining tax may hurt Iranian iron ore exports

Middle East / Iron Ore

Tehran may start taxing private iron ore miners, which will hurt small iron ore producers and worsen situation in the segment, especially in the export market.

The government intends to introduce a tax of up to 25% of mined iron ore cost for private producers after the Iranian New Year (March 21 2015). In return, the authorities will probably abandon the idea to impose a 10% export duty announced earlier, Reuters, an international news agency, reports. The move is due to the need to replenish the state budget on the back of economic decline caused by pressure from international sanctions and falling oil prices globally. However, market players believe that it may have an opposite effect on the national economy, injuring the Iranian mining industry.

Presently, Iranian private miners are estimated to produce 14 million tpy of iron ore, exporting 85% of the volume, according to IRNA information agency. China is the main outlet for Iranian private miners. Taking into account the slowdown in Chinese economy and a substantial decline in global iron ore prices since early 2014, exports of Iranian iron ore shrank by 10-15% to around 21 million t, according to Metal Expert's data. Around 30% of private mines were stopped in view of declining export demand. “Small mines, most of which are privately owned and highly dependent on exports in this situation, have no choice but to close,” chairman of the Iranian Iron Ore Producers and Exporters Association (IROPEX) Sajjad Ghoroqi told Financial Tribune, a local publication.

In the current situation, Iranian private mines will keep closing, with exports declining as a result, market players forecast. “Exports will probably lose 20-25% this year on introduction of the new tax and falling domestic iron ore prices,” one source with IROPEX told Reuters during an interview.

State-owned miners, in their turn, have been already paying a similar tax.