Rebar of 12-25 mm diameter is already being transacted by local traders in the Iranian market at $1,330-1,416/mt on ex-stock Tehran basis - a price which is about $10-40/mt less than last week and also about $85-95/mt less than two weeks ago. The current price reduction trend began a fortnight ago when the Iranian authorities released cheap Chinese origin rebar through the Tehran Mercantile Exchange. In the meantime, some players in the market say that the downward trend has been intensified by the imminent clearance of all its stock by one of the main domestic steel traders in Iran.
Meanwhile, the Iranian authorities and the 5+1 Group (the five permanent members of the UN Security Council plus Germany) recently agreed to start a new round of talks regarding Iran's uranium enrichment plan. This news created an expectation for a further price reduction in the local market and caused most buyers to halt their purchases temporarily. On the other hand, global prices are going up steadily and so the existing price reduction and stagnation in the Iranian market seems less likely to last for a long time. In this context, most traders are already looking forward to a new rising trend in the near future.
Rebar constitutes the largest steel market in Iran. State-owned mills working at full capacity currently supply a total of about three million mt of rebar per year. Private sector mills in Iran annually supply about 3.0-3.5 million mt to the market - a figure which is only about 30 percent of their combined installed production capacities of 10 million mt.
Iran imported about 530,000 mt of rebar in the last three months, marking a reduction of 12 percent in comparison with the corresponding period of last year when around 600,000 mt of rebar were imported. A large reduction in the import volume is not very likely in the current Iranian year; however, if a strong reduction were to be seen, it could cause a big impact resulting in over-heating in the local market.