The latest booking in the local Iranian market of 2-5 mm hot rolled coil was recorded at $490-510/mt ex-stock Tehran via trader for immediate delivery and payment in cash. This price indicates a decrease of about $10/mt compared to the week before.
On last Monday, May 11, Mobarakeh sold about 50,000 mt of hot rolled coil via the Iran Mercantile Exchange (IME) at around $455/mt ex-works for 40-day delivery and payment in cash. Although the delivery date was for 40 days later, the quantity of material was sufficiently large to cause a reduction of $5-10/mt in local market prices.
Most traders in Iran think that a rapid price decline is unlikely at the present time due to circumstances in both the local and global steel markets. As a result, they just look for fluctuations in prices and seek to benefit from these. Of course, such fluctuations do not exceed $10-15/mt, but this is more than enough in a heavily stagnant market.
The Iranian government cancelled the commercial profit tax on hot rolled coil in April 2008. This move encouraged local traders to import large volumes of hot rolled coil during the last Iranian year (21.03.2008-20.03.2009), as the cancellation of the tax increased the margins of Iranian traders in import activity. Due to the global economic crisis there has been a significant reduction in the import volume of all long and flat products in the last Iranian year (at least 20-30 percent) compared with the previous. However, hot rolled coil is the exception: Iran imported about 1.17 million mt of hot rolled coil in the last Iranian year, the same level as in the previous year according to Iranian customs data.