The prices of hot rolled coil/sheet and
plate have risen by a considerable margin in
Iran recently. Of course, there has been a general increase in global prices for all flat products. However, due to some delays on the part of Mobarakeh Steel Co. in delivering hot rolled products to Iranian traders, (who made advance payments a few months ago), the hot rolled market in
Iran has seen some high price increases during the past several weeks. Mobarakeh Steel - the main Iranian producer of hot rolled and cold rolled products – usually allocates some some of its capacity for export, while Iranian traders import some low quality flat products from the
CIS countries. This usually compensates for shortages in the local market. Nowadays though, due to the global increase in demand (including in the
CIS domestic markets), along with the high demand for steel in the Iranian domestic market, the price of hot rolled products has increased by about 20-25 percent during the last three to four weeks. Currently, most Iranian steel makers, such as Mobarakeh for instance, should supply their products via the Tehran Metal exchange which makes some additional charges for both sides (seller and buyer).There is a very high demand for hot rolled products (coil, sheet,
plate) at the Tehran Metal Exchange at present (five to ten times higher than supply), mainly because Mobarakeh has not supplied these products in the last 20 days. Naturally, such a cut in supplies usually boosts demand, which in turn causes prices to climb higher and higher. At present, a lot of buyers of hot rolled products, such as tube makers, have reduced
production since their requirements have not been met by Mobarakeh Steel. On the other hand, they cannot import these products because of their financial difficulties as regards L/Cs. Meanwhile, the general price increase for all goods in
Iran at the start of the Iranian New Year, which begins on March 21, 2007, will obviously affect the steel market and will result in further price increases. This eventuality could be forestalled or at least its effect could be diminished if the government encourages traders to import promptly - not such an easy thing to do given the prevailing trends in the global steel market.