Iran’s HDG market hits bottom, boom predicted

Iran's hot dip galvanized market has been experiencing a falling trend during the last few weeks, even though during the same period foreign suppliers' prices for hot dip galvanized and also for other flat products have been soaring steadily. Most local Iranian traders are expecting a recovery in the very near future both due to the global price increases for HDG and also due to the rising demand which is anticipated for the period after Ramadan (ends on September 20).
 
Hot dip galvanized coil of 0.50-1.00 mm thickness - the sizes which hold the largest share in Iran's HDG market - are currently being transacted by local traders at $900-1,020/mt ex-stock Tehran, down from Rials 9.30-10.50 million per metric ton two weeks ago
 
Hot dip galvanized prices have now touched rock bottom levels in the local Iranian market, with any further decline considered unlikely. Indeed, a prosperous market situation is expected to be seen when buyers return to the market after Ramadan. Furthermore, global prices of hot dip galvanized, which have been rising in recent weeks, will also reinforce local prices, especially when we note that Iran imports a significant part of its HDG requirements from the CIS, India, China and other sources. According to the Iranian customs authorities, Iran imported 182,000 mt of HDG and 90,000 mt of electro-galvanized in the last Iranian year (ended March 20).
 
Mobarakeh Steel, the main Iranian supplier of hot dip galvanized, is currently operating at its full capacity of 200,000 mt per year. However, other local mills, most of which are in the private sector, are operating below capacity, in particular due to shortages of finance and also of feedstock materials, i.e., HRC and CRC.