The latest bookings by Iranian traders of 0.5-1.0 mm cold rolled coil were concluded at a level of $840-1,025/mt ex-stock Tehran for immediate delivery. Last week local traders had been transacting the same material at $875-1,000/mt. Prices have been experiencing fluctuations in recent weeks in the Iranian domestic market. Current cold rolled price levels are down significantly when compared to the peak level of $1,280-1,390/mt in July 2008.
On Monday, November 24, at the Iran Mercantile Exchange (IME) Mobarakeh Steel sold 16,000 mt of cold rolled coil at $668/mt with delivery of two-to-three months and deferred payment. This price did not show any change compared with Mobarkeh's prior supply of cold rolled to the IME. Local traders, who had previously abstained from purchases in expectation of additional price decreases, finally came round to the view that further price reductions were impossible under the existing circumstances and that prices are at rock bottom levels for the time being. Thus, after several weeks' absence, on Monday traders decided to conclude some transactions with Mobarakeh through the IME.
Previously Iran's cold rolled coil market was largely dependent on imports; however, since Mobarakeh brought its cold rolling lines on stream last year, the import volume has fallen substantially. Mobarakeh now has a cold rolled coil capacity of about one million mt per year, while domestic market demand currently stands in the range of 1.2-1.3 million mt. A few privately-owned rolling mills also produce cold rolled coils in Iran at present but the shortage of slab means that they are unable to use their full capacity. In the first seven months of the current Iranian year (21.03-20.10.2008) Mobarakeh produced about 650,000 mt of cold rolled coil, while Iran imported just about 172,000 mt of cold rolled coil in the same period according to Iranian customs figures.