Rebar prices are soaring again in the current week in the Iranian domestic market following a few weeks of calm movement. Local traders are transacting 12-25 mm rebar sizes at $1,165-1,180/mt on ex-stock Tehran basis. The local rebar market in Iran had been calm in recent weeks due to the faint demand, as well as due to the Iranian government's policy of controlling market prices by fixing low sale prices for state-owned plants, regardless of the continuous rise in global steel prices.
The latest uptrend in the local rebar market started in mid-May when market demand began to show a gradual revival. Rebar of 12-25 mm size was in a price range of about $1,090-1,100/mt in the middle of May. The initially mild rising trend has seen a considerable intensification during the current week. Most traders already expect even higher prices for rebar in the local market, especially as local prices are significant lower than global levels. For example, in neighboring countries in the Persian Gulf a price range of about $1,300-1,350/mt is observed.
As the market leader, Esfahan Steel Co. has a strong influence on the local market through its supply volume and prices. This producer hiked it prices on Wednesday, selling rebar at $1,112-1,150/mt ex-works with a delivery of 55 days through the Tehran Mercantile Exchange. Last Sunday (May 25) it sold about 46,000 mt of rebar at the lower price of $1,038/mt ex-works with a delivery period of 55 days. On the same day Esfahan Steel sold small quantities of 100-500 mt at the higher price range of $1,090-1,142/mt to local traders. Also on May 25, another state-owned mill, Iran National Steel Industrial Group, sold rebar at $1,047/mt ex-works with 85-day delivery while Azarbaijan Steel Co. (also state-owned) sold rebar at $1,119/mt ex-works with 25-day delivery.
In recent years many housing, infrastructure, industry and other projects have been launched by private and governmental sectors in Iran. All of these projects require rebar and contractors usually purchase their requirements from the local market. However, at present local production is falling well short of meeting market requirements due to the shortage of billet. In the last Iranian year (21.03.2007-20.03.2008), Iran imported about 1.2 million mt of rebar, and a higher volume is expected to be imported in the current year.