Iranian CRC prices decline due to Ramadan and high inventories

Cold rolled coil prices have been on the way down during the past week in Iran, contrary to the steadily rising global trend of the last few weeks. Market players in Iran attribute the declining trend in the local cold rolled coil market to the stagnation caused by Ramadan and also to high inventory levels, and they expect to see further decreases in the market in the coming weeks. At the end of month of Ramadan the local market is likely to see some recovery, especially due to the buildup of demand during the month. Meanwhile, the rising trend in the global steel markets may also provide some support for local prices in the weeks ahead.
 
At the end of last week, cold rolled coil of 0.5-1.25 mm thickness was standing in a range of $720-780/mt based on ex-stock Tehran (including three percent VAT), compared to $740-820/mt one week previous. Mobarakeh Steel, the main Iranian supplier of flat products, has been hiking its prices gradually in recent weeks. On August 31, this producer sold cold rolled coil via the Iran Mercantile Exchange (IME) at $655/mt ex-works with an extended delivery period of 110 days: the price in question is $10/mt higher than Mobarakeh's price for its supplies via the IME three weeks before.
 
The high inventories of cold rolled coils and sheets, partly built up via higher import volumes, constitute another significant factor which blocks the recovery of Iran's cold rolled market at present. According to the Iranian customs authorities, Iran imported about 206,000 mt of cold rolled coil and about 68,000 mt of cold rolled sheet in the first four months of the current Iranian year (started March 21), compared respectively to about 118,000 mt and 25,000 mt in the same period of last year.