Mobarakeh Steel Co. raised its price of hot rolled coil in its last supply via the Iran Mercantile Exchange (IME) on July 27. The Iranian state-owned steel producer sold 8,000 mt of 2-4.99 mm hot rolled coil to local customers at $515-525/mt ex-works with 87-day delivery and for cash payment. Mobarakeh's initial price was lower; however, due to competition among buyers the producer managed to raise its prices to the above range. In its previous supply via the IME on July 21, Mobarakeh had sold the same material at $487/mt ex-works with a shorter delivery period of 63 days.
Also on July 27 via the IME, Mobarakeh sold 8,000 mt of 5-15 mm hot rolled coil at $546/mt ex-works with 87-day delivery and for cash payment to local Iranian buyers, whereas in its previous supply via the IME on July 21 it had sold the same hot rolled coil sizes at Rials 5.32 million/mt (approx. $534/mt) with a shorter delivery of 63 days.
Mobarakeh's price increase has already created a new rising trend in the local market. The producer's price hike first came as something of a shock to the local market and even forced some traders to close their sales; however, local traders gradually started to raise their offers for hot rolled coil and other flat products. While 2-15 mm hot rolled coil last week stood at a price level of $580-640/mt ex-stock Tehran, at present traders are talking about an increase of at least $10-20/mt and even more. Hot rolled coil prices in the local Iranian market have not stabilized yet and most market participants are expecting to see further increases in the coming days.
Mobarakeh's hot rolled coil output is unable to meet local Iranian market demand and the shortfall is usually met by imports from Russia, Ukraine, Kazakhstan and sometimes from China. The volume of hot rolled imports coming into Iran has increased in recent months but has been unable to exert a decreasing effect on local market prices, since for a few weeks now hot rolled coil prices have been rising globally, especially in the CIS countries.
According to the Iranian customs authorities, Iran imported about 396,000 mt of hot rolled coil in the first quarter of the current Iranian year (started March 21), down 28 percent compared to 310,000 mt in the corresponding period of last year.