Hot dip galvanized (HDG) prices have been rising in the past few weeks in the local Iranian market, just like prices of other flat and long steel products in the country. The main factor which has been boosting prices is the depreciation of the Iranian rial against foreign currencies, which means higher production costs as well as higher import prices for steel products on Iranian rial basis. Of course, each HDG producer has different prices, depending on quality and payment and delivery terms, but in general all producers have been raising their HDG prices in the last few weeks. In addition, Iranian traders who import HDG have also raised their prices due to the direct influence of the weakening of the rial.
Local galvanizing mills as well as traders are currently selling 0.5-1.25 mm HDG at about Rial 13.40 -16.10 million/mt (about $1,198-1,440/mt) ex-works for cash payment and immediate delivery, up from Rial 13.20-15.55 million/mt two weeks ago and also up from Rial 13.00-15.20 million/mt four weeks ago.
On December 26, Iran's main domestic flat steel producer Mobarakeh Steel sold HDG via the Iran Mercantile Exchange (IME) at Rial 12.74 million/mt (about $1,140/mt) ex-works with delivery of 90 days and for cash payment, up from Rial 11.96 million/mt at the end of November and up from Rial 11.39 million/mt at the end of October. Mobarakeh has been gradually raising its sales price of HDG for the local market in line with the increase in domestic HDG prices, although there is usually a large difference between the sales price of Mobarakeh and the HDG prices in the local market.
Iran imports HDG mainly from the CIS and India as local production of HDG is unable to fully meet domestic market demand. Iran imported about 150,000 mt of HDG in the first eight months of the current Iranian year (started March 21), as indicated by the Irainian customs authorities.
US$1 = Rial 11,180 (formal rate)