The domestic rebar market in Iran has fluctuated somewhat in recent days. There was a certain degree of price reduction observed during last week and at the beginning of the current week in the country's rebar market; however, as of Wednesday the market again started to move on an uptrend. Rebars of 12-25 mm sizes have increased to $1,100-1,120/mt on ex-stock Tehran basis while they stood at a range of $1,090-1,100/mt the previous week and were at $1,118-1,128/mt two weeks previous. Meanwhile, rebar imported from China has already reached a price of $1,075/mt at the southern Iranian port of Bandar Imam Khomeini.
Esfahan Steel Co., Iran's main supplier of rebar, sold a large volume of the product in question at $1,020-1,043/mt ex-works to local traders in recent days - a price range which is about $80 mt less than the actual market levels. Naturally, such sales have an influence on the domestic market prices and cause some temporary stagnation in the local market, even while rebar prices in the global markets continue to rise steadily, as they have done over recent weeks.
Iran's private sector rolling mills which have a total rolling capacity of about 10 million mt per year are entirely dependent on imported billet, mainly of CIS origin. These mills sell rebar at prices which are a little higher than those of the state-owned mills. They have great difficulty in competing with Iran's state-owned mills and frequently complain of the losses they suffer due to the Iranian government's policy of controlling market prices. The private sector mills find themselves obliged to import billet at global market prices while their domestic sales prices are strongly influenced by the activity of Iran's state-owned steel plants. Of course, the private sector mills in Iran usually produce just a certain limited number of rebar sizes for which demand is higher and supply lower, and, in this way, they manage to secure their profit margin. In spite of all their efforts, Iran's private sector rolling mills are unable to work at more than 30-40 percent of their capacity due to the billet shortages both in the local and global markets. However, existing circumstances have provided sufficient incentive for a lot of rolling mills to set up melt shops and so reduce their vulnerability to the the tightness in the billet market.
Meanwhile, demand for rebar in the Iranian market has not really been activated yet. The big contractors who are the main customers for rebar have not been in the market in recent weeks and, naturally, this build-up of future demand will provide strong upward momentum in the market in the coming period. Most traders expect a flourishing market for rebar in the near future when the big contractors enter the market to purchase large quantities. Meanwhile, on a global level steel prices continue to rise every day.