On May 12, Mobarakeh Steel Co. sold about 50,000 mt of CRC at the low price of $1,016/mt on ex-works Esfahan basis with 70-day delivery through the Tehran Mercantile Exchange (TME). In these latest sales Mobarakeh Steel, the main supplier of flat products in Iran with an annual capacity of about five million metric tons, did not announce any hike in its prices compared to its previous sales which took place around three weeks ago. The levels of the latest transactions completed through the TME will be valid for all direct sales of Mobarakeh in the local market until its next round of supplies through the TME.
On May 18, CRC sizes of 0.5-2.00 mm were transacted by local traders at $1,035-1,090/mt ex-stock Tehran, showing a reduction of $10-30/mt compared with last week's prices. In the meantime, the price of CIS origin CRC is a little lower than Mobarakeh's price on account of its lower quality.
Large sales performed by Iranian state-owned steel plants, especially Mobarakeh Steel, during the past three weeks have absorbed a large volume of money from the local market. This created a fall in market demand. Naturally, any shortage of money in the market will not last for long as traders gradually sell off their purchased material before eventually returning to the market again. When the traders do actually come back to the market in near feature, we could observe higher demand and, hence, higher prices.
Mobarakeh Steel increased its production of CRC in the last Iranian year (20.03.2007-20.03.2008) by 30 percent, producing about 1.130 million mt of CRC which is lower than its full capacity. Iran imported about 350,000 mt of CRC in the last Iranian year, down from about 500,000 mt in the previous Iranian year - according to reports newly published by the Iranian customs authorities. The reduction of the import volume could be attributed to the increase in Mobarakeh's output of CRC in the last Iranian year. Even Mobarakeh's sales manager Mr. Mohammad-Reza Shamsabadi stated recently that the producer has some additional CRC production capacity and that they may export the extra output in the future.