Mobarakeh strongly cuts price in Iranian HRC market sales

Wednesday, 10 September 2008 17:09:42 (GMT+3)   |  
       

On September 8 at the Iran Mercantile Exchange, Mobarakeh Steel Company sold about 40,000 mt of 2-15 mm hot rolled coil at the incredible price of $790/mt ex-works with delivery of about 75 days and two-month deferred payment - a price which is more than $100/mt less than its last supply of this product. At the Exchange on the same date, Mobarakeh also sold about 18,000 mt of 2-15 mm hot rolled coil at the higher price of $900-920/mt ex-stock with delivery of about 45 days and deferred payment of two months.

The surprising point is that in its latest sales Mobarakeh has sold its products with deferred payment of two months while it was selling material for cash payment up to a few weeks ago. Expectations of further price reductions have created some stagnation in the local Iranian market with most customers already holding back from placing orders. Naturally, the existing circumstances have forced Mobarakeh to reduce its price and also to allow deferred payment. Mobarakeh also substantially reduced its sales prices of cold rolled coil and hot dip galvanized in its last sales on 8 September 2008.

The abovementioned latest supply of hot rolled coil from Mobarakeh and the significant price reduction it represented had the effect of deeply disturbing the market. Traders are now adjusting their hot rolled coil offers while there are no big transactions in the spot market as prices have not stabilized yet. At present some traders are offering 2-5 mm hot rolled coils at $820-870/mt ex-stock Tehran; however, most traders have closed their sales and are waiting until next week. Meanwhile, Russian origin 2 mm hot rolled coil is already being offered by local traders at $800/mt ex-stock Iranian northern port of Anzali.

Hot rolled coil has the largest market among other flat products in Iran, the same as in other markets, and naturally the fluctuation of the hot rolled coil price directly influences other flat products such as cold rolled coil and hot dip galvanized. In the last Iranian year (21.03.2007-20.03.2008) Mobarakeh produced about 3.2 million mt of hot rolled coil, with the Saba plant affiliated to Mobarakeh producing about 440,000 mt. In the first five months of the current Iranian year, Iran imported about 450,000 mt of hot rolled coil (in thicknesses less than 3 mm), while it imported about one third of that volume in the corresponding period of the last Iranian year, according to Iranian customs.


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