Iranian traders are already transacting 12-25 mm rebar at a price level of $1,100-1,120/mt ex-stock Tehran. A fluctuation has been seen in the market since the end of the Iranian New Year holidays (05.04.2008), when the market opened after a long break of 20 days. Iran's rebar market, just like the country's markets for other long and flat products, experienced peak levels after reopening, with rebar prices reaching a range of $1,155-1,165/mt ex-stock in early April 2008. However, this trend could not be sustained for long and after a few days prices began to decline gradually. Rebar prices have been stable for a few weeks now with just small variations being observed.
Meanwhile, Esfahan Steel Co., Iran's main state-owned producer of long products (rebar and I-beam), has not sold any material since early April 2008 when the market opened after the New Year holidays. Esfahan Steel has closed its sales under pressure from the Iranian authorities, who are trying to keep steel prices (especially those of sections used in the construction industry) from soaring since the result would be price increases for a lot of other products and higher overall inflation.
Naturally, there is high demand in the market thanks in particular to the renewal of construction activities in the spring following the very cold winter which hindered all projects in Iran over a period of about two months. The private sector rolling mills are currently supplying the Iranian market with rebar, in contrast to Esfahan Steel whose rebar sales have been closed for over one month. The private sector mills, which mostly have annual capacities in a range of 100,000-500,000/mt have greater flexibility and are able to proceed with their business very actively. However, there are two main factors preventing them from working at full capacity - financial restrictions and shortages of billet in the global market. These factors combined mean that the mills in question are not able to import enough billet and reach their full total capacity which is about 10 million mt per year.
Also, a large volume of imported rebar stockpiled at Iran's northern ports prevents prices from moving above the global price levels. In addition, there are reports circulating regarding a possible reduction of the customs duty on rebar, which naturally could influence market prices, at least for the short term.