Iranian HRC market declines from late February levels

Hot rolled coil prices have been falling in the local Iranian market both last week and in the current week after the price rise observed in the last week of February. 2-5 mm hot rolled coil - the size range for which there is greatest market demand -  is currently standing at levels of about $650-680/mt ex-stock Tehran, down from $720-730/mt ex-stock in the last week of February.
 
On March 8, Iranian state-owned supplier Mobarakeh Steel sold a few batches of hot rolled coil (about 28,000 mt) through the Iran Mercantile Exchange (IME) at $570-578/mt ex-works with about 70-day delivery - unchanged over the previous two weeks. The same producer had sold hot rolled coil at $667-696/mt ex-works through the IME on February 22 last, following the soaring trend in the Iranian finished products market in the second half of February. Mobarakeh was subsequently unable to maintain HRC sales prices at the high levels of $667-696/mt due to government policy for the restriction of local market prices.
 
Iranian government policy for the cancellation of energy subsides in the near future as well as the traditional rush to conclude purchases in the last weeks of the Iranian year (ends March 20), and also the high inflation rate in Iran (over 25 percent ) can be indicated as some of main factors responsible for the rising trend in the Iranian steel market in the second half of February this year. While the government has succeeded in restricting steel market prices for the time being, the possibility of an additional price surge again due to the abovementioned factors cannot be ruled out.
 
Import flow is another factor which can influence local market prices. According to the Iranian customs authorities, Iran imported about 1.62 million mt of hot rolled coil in first 10 months (21.03.2009-20.01.2010) of the current Iranian year, up over 60 percent compared to about 1 million mt in the corresponding period of the previous Iranian year.