In the Iranian domestic market local production 12-30 mm plate is currently standing at a price level of $750-770/mt while thicknesses over 30 mm cost $940-960/mt, both on ex-stock Tehran basis and up about $10-30/mt compared to the previous week. Iranian producer Kaavian Steel, as the sole domestic producer of heavy plate, usually plays an important role in determining market prices of plate in Iran in the absence of any other local competitor. In particular, with the decline seen in imports of heavy plate into Iran, it is easier for Kaavian Steel to increase its prices.
Of course new plate producer Khouzestan Oxin Steel, which has a designed annual rolling capacity of 1.05 million mt, is currently in its final testing stage and is expected to come on stream within one to two months. However, market conditions are not likely to change significantly at least within the next one to two years as it will take Khouzestan Oxin around two or three years to reach its nominal capacity. This new producer, based close to the southwestern Iranian city of Ahwaz near the Persian Gulf, will be able to roll plates of 1.1-4.5 m in width, of 5-150 mm in thickness, 2.5-24 m in length, and in API grades for the oil and gas pipe industry, and also in other grades.
Russia and Ukraine hold the largest market share among foreign suppliers of heavy plate in Iran. Ukraine origin St 37 plate stands at a price level of $525-540/mt CFR Iranian northern ports while the price of this Ukrainian material for a destination in the south of Iran (Persian Gulf) will be about $10-15/mt lower. Steel from Ukraine and Russia can be shipped to both the northern and southern Iranian ports. The sea freight charges from these countries to Iran's southern ports are lower by around $10-15/mt than to the country's northern ports even though the distance to the southern ports is greater. This is because ships traveling to the northern ports have to pass through the Volga-Don Canal which restricts vessel capacity to a maximum of 7,000-8,000 dwt; meanwhile, ships traveling to southern Iranian ports may have far greater capacities of around 60,000-70,000 dwt.
The decline of plate imports in the last Iranian year (21.03.2008-20.03.2009) can be indicated as one of main factors which has caused plate prices in the local Iranian market to soar in recent months. According to the statistics newly issued by the Iranian customs authorities, Iran imported about 340,000 mt of heavy plate (i.e. of thicknesses above 10 mm) in the last Iranian year compared to over 600,000 mt in the previous Iranian year.