Iranian HRC market still has some way to go before it hits bottom

Thursday, 30 October 2008 17:02:04 (GMT+3)   |  
       

Hot rolled coil prices are on the decline in the Iranian market, just like other flat and long steel products. There appears to be no halt to the slumping market situation and it seems like we have a long way to go yet before we hit rock bottom. Meanwhile, prices have approached the levels of 2006.

Ex-CIS ready stock hot rolled coil of 2mm thickness is now standing at a price of about $580/mt on ex-stock Iranian northern ports basis, while just one week ago it stood at about $100/mt higher. Mobarakeh Steel's 2 mm thick hot rolled coil - of higher quality compared with ex-CIS material and not so strongly influenced by the recent falling trend yet - is in a price range of about $700-710/mt ex-stock for immediate delivery. 2mm hot rolled coil has the largest market share among the other sizes as it is mostly used in the production of hollow sections and profiles, etc.

Ready stock of 3-5 mm hot rolled coil produced by Mobarakeh stands at about $700-710/mt ex-stock Esfahan, while it was about $120/mt higher just one week ago.

Mobarakeh sold about 21,000 mt of 2.5-15 mm hot rolled coil at about $757/mt ex-works, with a delivery of 55 days and deferred terms of payment, through the Iranian Mercantile Exchange on October 27.  Another lot of the same material failed to find a buyer on the same day; prospective buyers had made a bid of about $545/mt but Mobarakeh was unwilling to accept this price.

Iran had reduced its custom duty on hot rolled coil to zero early in the current Iranian year (started 20 March 2008) when global prices were soaring steadily. This policy was aimed at controlling local market prices which were escalating beyond global levels at that time. Now, however, local traders and producers of hot rolled coil have asked the government to impose the previous custom duty (four percent) in order to prevent the Iranian market from being flooded by imports.

Iran imported about 522,000 mt of hot rolled coil (thicknesses less than 3 mm) in the first six months of the current Iranian year, while it imported just 200,000 mt in the same period of last year - according to the newly-published statistics from Iran's customs authorities.


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