Current situation in the Iranian market

Current situation in the Iranian market

There has been a political uncertainty and unrest in Iran for a certain while as the reformist president Khatami had his problems with the opposition. Market sources now report that the problems may be resolved soon. Having said that; there is still some concern that the issues may also lead to Mr. Khatami's resignation and further unrest. The Government is expected to push for economic liberalisation. However, the pace and scope of any such liberalisation will be subject to delay and disruption as long as high oil prices remove immediate pressure for change. The Iranians had a pretty good two year economywise with stable exchange rates. Iranian market is an importer of steel products up to 3 million mts per year but as of today, there are obvious concerns with regard to the potential war in neighbouring Iraq which could also have a negative impact on the imports. The imports have dropped drastically due to war risk and the economy in Iran is expected to start suffering as a consequence by the beginning of the second quarter of the year. Market sources report there is expectation that the budget for 2003 will change the tax structure for imports to stimulate growth. Demand for billets has been quite good in the market during the last few months. Buyers tried to cover their requirements before war closes the doors for shipments into Persian Gulf. As a consequence, prices increased, but nowadays suppliers do not talk about similar strong demand from Iran. Trades that are active in the Iranian market talk about consistent demand for API grade hot rolled coils as well as plates. On the other hand, the market is also in need of thin gauge hot rolled coils where Egyptian and Russian origin materials compete. Ispat Karmet has always been a major player in Iranian market through Caspian Sea shipments. According to market players Ispat Karmet hot rolled coils are offered at the range of $355-360/mt on CFR FO Caspian Sea port basis, lately.