Prices in Iran's rebar market are currently experiencing a declining trend. 12-25 mm rebar is now being transacted by local traders at $1,400-1,433/mt, whereas last week it stood in a price range of $1,422-1,498/mt on ex-stock Tehran basis, thus marking a reduction of $22-65/mt. The current downtrend in prices started when the Iranian Ministry of Commerce initiated sales of Chinese rebar and I-beam through the Tehran Mercantile Exchange in the middle of last week.
The supply of Chinese rebar by Iran's Ministry of Commerce at a low price of about $1,330-1,347/mt ex-stock Tehran had a very strong influence on the market, coming as a shock to local traders. There are some rumors that the Iranian authorities intend to supply around 300,000 mt of Chinese steel (mainly rebar and I-beam) through the Tehran Mercantile Exchange. The significant supplies of Chinese rebar to the market, both last week and during the current week, severely limited the market possibilities for local steel plants, preventing them from selling their products at their targeted prices.
On the other hand, the large deliveries of rebar performed by state-owned mills during recent days - material which had been sold by them a few weeks ago - was also another factor influencing the local market and intensifying the downward trend. Most traders think that the market is seeing just a temporary fluctuation and that prices will soar again in the near future due to both global and local circumstances, especially given that Western countries are imposing new and tighter sanctions against Iran on account of its nuclear project.
The private-owned rolling mills in Iran, which often complain about the control of market prices by the Iranian authorities, have already modified their prices in line with the current circumstances; however, they usually prefer to produce certain rebar sizes which offer higher prices and larger margins.