Increases in Iran’s HDG market though demand is not so strong

The Iranian hot dip galvanized (HDG) market has indicated some increases during the last two weeks although local market demand is not so strong and the approach of the winter season may also further weaken domestic demand in the coming weeks. The major part of local market demand for HDG is at present supplied by domestic producers.
 
Local traders are currently offering 0.5-1.25 mm HDG at about $950-1,035/mt ex-stock Tehran, up from $915-1,015/mt about two weeks ago, while HDG offers were at about $960-1,025/mt four weeks ago. The Iranian HDG market has in general been on a rising trend since the begining of 2010, although there was some price reduction in the middle of 2010 and also in September. HDG prices in the local market hit their lowest level in 2010 in the second half of June when they fell to $840-890/mt ex-stock Tehran.
 
In the last two weeks the main domestic flat steel producer, state-owned Mobarakeh Steel, has not sold any HDG via the Iran Mercantile Exchange (IME). The producer's last HDG sales via the IME go back to September 27 when it sold some batches of HDG at $857/mt ex-works with 90 to 115- day delivery for cash payment. Mobarakeh's direct sales prices are usually significantly lower than free market prices as delivery times are generally around three months while buyers have to pay cash when they place theiir orders.