HDG prices in the local Iranian market have been soaring over the past few weeks, with the price of ready stock hot dip galvanized coil having now hit the level of $825-866/mt ex-stock Tehran, up from $815-835/mt the week before and up from $794-825/mt two weeks previous. The rumors of an imminent import duty increase for some long and flat steel products can be cited as the main factor behind the rising HDG price trend seen over the last few weeks. While the Iranian government has not yet approved any increase in import duty on steel products, rumors of such a measure have been sufficient to push up local steel prices significantly.
On Monday, June 1, Iranian state-owned steelmaker Mobarakeh Steel sold hot dip galvanized coils at $742/mt ex-works via the Iran Mercantile Exchange (IME). This sales price represents a decrease of about $40/mt from Mobarakeh's sales price of two weeks ago. While Mobarakeh has reduced its prices for hot dip galvanized coil in the local market, its sales policy aimed at stabilizing market prices has little chance of success given the upward movement of prices in the free market over the last couple of weeks.
Domestic HDG production in Iran is still unable to meet local market demand even though domestic production has seen a substantial increase over the last few years. Iran satisfies its shortfall of HDG mainly through imports from the CIS, China, and India. Among these foreign supplies, Indian HDG is considered to have the highest quality while Chinese HDG is is viewed as having the lowest. Usually, imported HDG materials are at price levels which are close to those of local materials. According to the Iranian customs authorities, Iran imported 188,000 mt of hot dip galvanized coil in the last Iranian year (21.03.2008-20.03.2009).