Mobarakeh supply halt helps push up local Iranian HRC prices

Thursday, 11 June 2009 16:54:42 (GMT+3)   |  
Hot rolled coil prices have been increasing rapidly in the local Iranian market over the past week. During a couple of weeks recently state-owned Mobarakeh Steel Co., the main supplier of flat products in Iran, halted its supplies of HRC to the local market due to upgrades and modifications being carried out at its production facilities. This resulted in the increase of hot rolled coil prices in the local market, a trend which intensified over the past week.

Currently, 2-5 mm HRC from local traders is being transacted at $580-663/mt ex-stock Tehran, up from $537-577/mt just two weeks ago. Of course Mobarakeh has now resumed its HRC supplies and so the rising trend is likely to come to a halt and prices may even subside in the coming days.

On June 8, Mobarakeh sold about 235,000 mt of different HRC sizes via the Iran Mercantile Exchange (IME) at $460-473/mt ex-works with delivery of 45-75 days to local customers. Mobarakeh has not increased its price for HRC recently, even though HRC market prices have increased substantially over the last 10 days. Naturally, the lack of an increase in Mobarakeh's prices may in part help to cool the local market.

Most traders and market analysts hold the view that local HRC prices cannot remain at such a high level for long if Mobarakeh continues to supply material in the coming days. Of course global HRC prices constitute another major factor liable to influence local prices as part of the requirements of Iran's domestic HRC market are met by imported supplies.


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