Hot rolled coil prices have continued to fall in Iran's domestic market. 2-5 mm thick material is now changing hands at $780-850/mt ex-stock Tehran from local traders - i.e. about $20-30/mt lower than last week and about $40-50/mt down on two weeks ago. Around 10 days ago Mobarakeh concluded its last local sales (for thicknesses of 2-16 mm) at a price of $780/mt with 65-day delivery and deferred payment, while it sold the same material at about $120-140/mt higher at the beginning of September.
In the last few weeks Mobarakeh has reduced both local and export prices in line with the global price reduction in steel; however, during the current week the producer has not offered any new supplies. Mobarakeh usually performs sales at least once a week through the Iran Mercantile Exchange (IME), which is the formal sales channel of state-owned plants in Iran.
Russian origin hot rolled coil of 2 mm thickness (2 mm is the specification which is registering the highest demand) is being offered by traders at $720/mt ex-stock Iranian northern ports for immediate delivery. CIS hot rolled coils are usually sold at a lower price than Mobarakeh products due to their lower quality. Nowadays there are some discussions among the Iranian authorities regarding the imposition of customs duty on hot rolled coil. Back in April this year the Iranian government cancelled the customs duty on hot rolled coil, as a measure to control the rising trend seen in the market at that time.
Iran imported about 460,000 mt of hot rolled coil (of thickness less than 3 mm) in the first five months (21 March-20 August 2008) of the current Iranian year, while it imported just about 150,000 mt of the same material in the corresponding period of last year. This trebling of the hot rolled coil import volume in the five months in question is a reflection of the customs duty cancellation by the Iranian government early in the current Iranian year.