During the current week heavy plate has experienced a sharp price fall in the Iranian domestic market. Ready stock heavy plate of 15-30 mm thickness, i.e. the construction grades which register the highest demand, are already being transacted by local traders at $770-780/mt on ex-stock Tehran basis. Last week, the same size heavy plate stood at a price range of $855-865/mt ex-stock Tehran, whereas in early July this year its price had touched a peak of about $1,300/mt.
At present, heavy plate in the local Iranian market has dropped back down to the price levels of November 2007. Given both the local market circumstances and also the global steel market situation, there is a general expectation among players in Iran's heavy plate market of a continuation of the decline trend which has been ongoing since July this year. The worldwide economic crisis has also impacted on Iranian steel traders who are still suffering heavy losses.
The sole domestic producer of heavy plate in Iran is Kaavian Steel which is unable to meet market demand due to its capacity of just 400,000 mt per year and its maximum plate width of 1,200 mm. Iran meets its shortfall of heavy plate by importing from CIS countries, especially from Russia and Ukraine. The Russian steel supplies usually reach Iran via the Caspian Sea while Ukrainian steel imports arrive in the country via the Persian Gulf at sea-freight charges considerably higher than for the Caspian Sea route. In addition, China also holds a significant market share in the Iranian heavy plate import market.
Iran imported about 200,000 mt of heavy plates (thicknesses of 10 mm and higher, and widths of 1,850 mm and higher) in the first half of the current Iranian year (i.e. in 21.03- 20.09.2008) while it imported about 300,000 mt in the corresponding period of last year - according to the data from the Iranian customs authorities.