On June 22 state-owned Iranian producer Mobarakeh Steel Company sold about 90,000 mt of hot rolled coil to local traders at $450-464/mt ex-works for 60-day delivery and payment in cash thorough the Iran Mercantile Exchange (IME). For a few months now Mobarakeh has not changed its sales price for hot rolled coil even though some fluctuations have been observed in the local market.
Hot rolled coil is one of the few steel products demand for which has not suffered so much during the unrest that has followed the June 12 Iranian presidential election in Iran. Local HRC prices in the country have in fact posted a slight increase since the election whereas the prices of most long and flat steel products in Iran have registered a decline over the same period. Most traders expect further rising movement in the hot rolled coil market over the coming weeks. However, such optimism does not exist as regards other finished steel products in Iran.
Demand is high for hot rolled coil in the local Iranian market as there are plenty of customers (both mills and traders) who are demanding hot rolled coil in large quantities. Meanwhile, Mobarakeh, the main supplier, is unable to meet local market demand.
The latest offers for 2-5 mm hot rolled coil in the local Iranian market are at $550-610/mt ex-stock Tehran, compared to a price level of $550-590/mt the week before and $580-650/mt two weeks ago. Thus, HRC prices have increased slightly in the current week.
Commenting on the existing situation in Iran's domestic hot rolled coil market, one trader said, "Hot rolled coil inventory is not so high in the local market and may cause some rising trend in the hot rolled coil market if the government manages to control the social unrest. On the other hand, Mobarakeh will not be able to supply sufficient material to the local market in the coming weeks."