The latest offers of
CIS origin hot rolled coil of 2-8 mm thickness stand in the range of $1,100-1,140/mt CFR Iranian northern ports for delivery in September or October. Foreign suppliers usually ask for payment by cash or by letter of credit from non-Iranian banks, given that the Iranian banking system has been under UN sanctions since 2007 due to
Iran's nuclear program. In the meantime, most foreign suppliers, especially those with a large market share and with long experience in the
Iran market, have already have found other by-pass channels by means of which letters of credit from Iranian banks are accepted, though extra costs of around 5-10 percent are added for such services.
Hot rolled coils of 2-8 mm thickness are being transacted by local traders at about $1,080-1,160/mt ex-stock Tehran by local traders. On Monday, August 4, Mobarakeh Steel Company, which is the main local supplier of flat products (annual capacity of about five million mt) sold hot rolled coils of 2.5-8 mm thickness at $1,022-1,124/mt ex-works with a lead time of about 50 days through the Tehran Mercantile Exchange. Mobarakeh Steel has not reduced its prices for hot rolled coil and other flat products in the local market in spite of the significant global downtrend seen in recent weeks.
The high inventory levels of hot rolled coil in the local market, the new declining trend in the global steel markets and also the Iranian government's policy favoring the appreciation of the Iranian rial against the US dollar are all factors which have contributed to creating stability and even stagnation in the local market. Nevertheless, most market players were expecting this to be just a temporary trend which would not last more than a few weeks.
Mobarakeh Steel, which in previous years had exported more than one million mt per year of flat products, only exported about 0.7 million mt of this product category in the last Iranian year (20.03.2007-19.03.2008). Meanwhile, Mobarakeh's output has increased substantially during recent years. High demand for flat products in the local market has not allowed Mobarakeh to sustain its export volume, and so an export volume even smaller than last year's is expected for the current year.
Iran imported about 1.2 million mt of hot rolled coil (all sizes) in the last Iranian year (1386), according to the newly issued Iranian customs figures. Meanwhile, a higher import figure is expected for the current year, especially as the Iranian authorities reduced the customs duty from 10 percent to four percent a few months ago.