HRC posts substantial decline in local Iranian market

Hot rolled coil prices have in recent days registered a substantial decline in the local Iranian market. 2-5 mm thick material is currently transacting at a price range of $910-940/mt ex-stock Tehran for immediate delivery, while prices stood at $950-1,000/mt last week and were even higher than $1,000/mt a few weeks ago. Russian origin hot rolled coil of 2 mm thickness is already being offered by importers at $870/mt ex-stock Iran's northern ports for large quantities - 2 mm thick material records the highest demand level in the local market as it used by most local mills involved in the production of pipes and hollow sections.
 
Flat products, and especially hot rolled coils, have been experiencing some fluctuations in recent days with prices coming down substantially. Meanwhile, long products in the Iranian market have already reached stable price levels after posting large reductions in past weeks.
 
Yesterday, August 25, Mobarakeh sold about 54,000 mt of 2-8 mm thick hot rolled coils at $906-927/mt ex-works for approx. 55-day delivery through the Iran Mercantile Exchange (IME). Buyers' resistance to Mobarakeh's prices, which were higher than transactions at the start of yesterday, forced Mobarakeh to reduce its prices. In the end, both sides, the buyers and Mobarakeh, managed to reach some consensus on the issue of prices. Besides Mobarakeh, which is the main supplier of flat products in Iran, Ferro-Gilan is also a major local flats producer in Iran - a privately-owned rolling mill capable of producing hot rolled coils in thicknesses of 8-15 mm. However, a shortage of slab does not allow this producer to use its full capacity which is about 1.5 million mt per year.
 
Iran is largely dependent on imports of hot rolled coils, especially from CIS countries, since local production falls well short of meeting market demand. Iran imported about 1.1 million mt of hot rolled coils in the last Iranian year (21.03.2007-20.03.2008), according to Iranian customs.