Rebar prices continue to decline in the Iranian domestic market at a faster rate than other long products. 12-25 mm rebars have been transacted this week by local traders at $640-680/mt on ex-works Tehran basis for immediate delivery by local traders. Last week the same size rebar was transacted at $685-735/mt, while two weeks ago it stood at $800-850/mt, also on ex-stock Tehran basis. Rebar prices have consistently been on a downtrend since July 2008, with just occasional short pauses of a few days in duration. Such a strong trend has already forced all traders to cease significant purchases both from local mills and from foreign suppliers. The local traders are still holding out for rock bottom prices and hope that the anticipated low levels may compensate for the heavy losses which they have incurred in recent months.
On Monday, November 3, the main state-owned supplier, Esfahan Steel, sold rebar at $650/mt for immediate delivery and deferred payment through the Iran Mercantile Exchange (IME); meanwhile, on the previous day Azarbaijan Steel had failed to sell rebar at the same price level, again at the IME. Although both state-owned steel plants and privately-owned rolling mills have reduced their rebar prices, buyers are still staying away from the market and so no significant volume of transactions has yet been observed in the local market. As an additional factor, the approach of winter with its dampening effect on construction activities is also helping to intensify market stagnation at present.
Since July 2008 when global steel prices started their decline, local private-sector rolling mills in Iran have been asking their government to increase the customs duty on rebar as they are unable to compete with rebar imported from the CIS and China under the existing customs duty of 11 percent. Early in the current Iranian year, the government in Iran had reduced the customs duty on rebar down from 16 percent in order to bring overheated local market prices under control.