Hot rolled coil prices have been on the decline both last week and in the current week in the local Iranian market due to local and global developments in the steel markets. 2-5 mm hot rolled coil in the Iranian market is currently standing in a price range of about $620-690/mt ex-stock Tehran, down from $650-720/mt ex-stock two weeks ago.
While the decrease in flat product prices in the global markets has influenced the Iranian domestic market in the last two weeks, the main Iranian flats producer Mobarakeh Steel has not changed its local sales prices for hot rolled coil. On October 12, Mobarakeh sold a number of batches of 2-15 mm hot rolled coil via the Iran Mercantile Exchange (IME) at $579-591/mt ex-works with delivery of 70 days, a price range which shows no change compared with the last few weeks.
For about two weeks now the local Iranian hot rolled coil market has been experiencing a falling trend, in the wake of the rising trend of the previous few months. Furthermore, due to the large inventories built up by local traders, there is no expectation of an upturn in local prices, though some fluctuations might be seen.
Iran imported about 700,000 mt of hot rolled coil in the first five months of the current Iranian year (started March 21), which means that imports of roughly 1.7 million mt can be expected for whole of the current Iranian year if the existing import flow is maintained until the end of the year. On the other hand, exports by Mobarakeh will not exceed 500,000 mt for the whole of the current year, compared to about one million mt per year before the global downturn hit in 2008. Naturally, a reduction in Mobarekeh's export volume is likely to result in greater supplies of hot rolled coil to the local market by this producer, thereby leading to even higher inventories in the local market.