Iran's hot dip galvanized (HDG) market has, like the overall domestic steel market, been experiencing a rising trend in the last few weeks in line with the weakening of the Iranian rial. At present, one US dollar can be exchanged for about 16,800-17,200 rials, compared to 13,500 rials just one month ago. In addition, the high inflation in Iran, at around 25-30 percent, has also influenced the prices of all commodities in the country.
All galvanizing mills and traders in Iran have raised their HDG prices significantly, and buyers are obliged to accept the higher prices. Meanwhile, there is a fear in the market that prices may go up further in the coming days, causing some buyers to rush to conclude purchases, which in turn places more upward pressure on prices.
Local galvanizing mills and traders are currently selling 0.5-1.25 mm HDG at about Rial 14.50-16.30 million/mt (about $1,289-1,449/mt) ex-works for cash payment and immediate delivery, up from Rial 13.40 -16.10 million/mt about two weeks ago and up from Rial 13.20-15.55 million/mt about four weeks ago.
On January 9, Iran's main domestic flat steel producer Mobarakeh Steel sold HDG via the Iran Mercantile Exchange (IME) at Rial 13.03- 13.25 million/mt (about $1,158-1,178/mt) ex-works with delivery of 90 days and cash payment, up from Rial 12.74 million/mt on December 26, 2011 and Rial 11.96 million/mt at the end of November. Mobarakeh has been gradually raising its sales price of HDG for the local market following the price increase of HDG in the local market.
US$1 = Rial 11,250 (formal rate)