In the Iranian domestic market hot dip galvanized (HDG) coils of 0.60-1.00 mm thickness - the sizes for which there is greatest demand in the market - are now in a price range of $1,090-1,250/mt on ex-stock Tehran basis for immediate delivery. Meanwhile, 0.40 mm and 0.50 mm thick HDG stand at a far higher price than other sizes, at $1,520/mt and $1,450/mt ex-works Tehran respectively. Current HDG prices are about $50-80/mt less than in August. However, over the past two weeks the HDG market in Iran has been stable, even though most other long and flat products have been posting declining trends during the current month.
At the present time, most local traders are not seeking to conclude any bookings with foreign or local suppliers of HDG due to the lack of stability in the global markets. The predominant view among traders is that there is a greater chance of incurring losses rather than making profits if they agree to any transaction at present. Due to the falling demand in the local market stocks are now piled high at most galvanizing mills. On the one hand the mills cannot find buyers, while on the other hand they cannot cut their production.
At the Iran Mercantile Exchange - the formal sales channel of state-owned steel plants in Iran - Mobarakeh Steel Company's latest sales of 0.50-1.00 mm thick HDG were performed on Monday at a level of $1,120/mt ex-works with 100-day delivery and deferred payment. With annual capacities of 200,000 mt of HDG and 100,000 mt of pre-painted galvanized (PPGI), Mobarakeh Steel is the market leader in Iran, where its prices usually have a strong, direct influence on the prices of other local suppliers.
Iranian HDG production falls short of meeting domestic market demand, even though a few new mills have come on stream in recent years. Iranian traders or industries usually import their HDG requirements, in first place, from the CIS - due to the competitive prices involved - followed by India and China. Iran imported about 87,000 mt of HDG in the first six months of the current Iranian year (21.03-20.09.2008) according to Iran's customs statistics. During the corresponding period of last year Iran had imported about 100,000 mt of this steel product.