On Monday, April 20, Mobarakeh Steel sold about 30,000 mt of 2.5-12.5 mm hot rolled coil at $450-463/mt ex-works to local buyers through the Iran Mercantile Exchange (IME), from a total of about 53,000 mt of hot rolled coil which the producer supplied to the IME on the same day. It is a sign of the deep stagnation in the local Iranian HRC market that Mobarakeh is having such difficulty selling its material, especially as there is usually strong competition at the IME for Mobarakeh's products.
Mobarakeh Steel has not changed its prices for a few months now, but the expectation is growing among traders that due to the existing stagnation and weak demand the producer will sooner or later announce reductions. Of course a price cut could stimulate the market temporarily; however, it will not be able to create strong demand in a market where there is an absence of any significant movement at the present time. It is obvious that, as the main flat steel product supplier in Iran and as a state-owned plant, Mobarakeh Steel is not so worried about local market demand since it can easily export its surplus. Nevertheless, weak demand will force even Mobarakeh to revise its sales policy in the future.
2-5 mm hot rolled coils - the sizes usually most in demand among Iranian buyers - are currently being sold by local wholesalers at $500-520/mt ex-stock Tehran. This price is about $50-60/mt higher than the direct sales price from Mobarakeh. Indeed, market prices may fall down even before Mobarakeh revises its prices.
According to the newly-issued figures from the Iranian customs authorities, Iran imported about 1.17 million mt of hot rolled coil in the last Iranian year (21 March, 2008-20 March, 2009).