Prices surge in Iran's hot dip galvanized market

Iran's domestic hot dip galvanized market has been indicating a rising trend in the past two to three weeks in line with a similar development in the country's hot and cold rolled coil markets. Currently, 0.5-1.25 mm hot dip galvanized - the size range which holds the largest share of Iran's HDG market - stands at price levels of $930-1,080/mt ex-stock Tehran, up from $910-990/mt the week before and up from $870-910/mt two weeks ago.
 
On July 21, state-owned Mobarakeh Steel Co. - the main local Iranian supplier of hot dip galvanized - sold a batch of about 5,000 mt of the product in question via the Iran Mercantile Exchange (IME) at $722/mt ex-works with 92-day delivery and for payment in cash. Although Mobarakeh has not changed its hot dip galvanized prices for a few months now, local traders have been hiking their prices gradually over the past few weeks. Among local Iranian suppliers, Mobarakeh produces the highest quality hot dip galvanized and so its price is higher than those of other local suppliers including Fajr Sepahan, Semnan Rolling and Tubes Mills, and Seven Diamonds.
 
The Iranian market's hot dip galvanized requirements are mainly supplied by local mills. However, apart from Mobarakeh, the other galvanizing mills are unable to operate at full capacity due to supply shortages of hot and cold rolled coils and also due to financial restrictions. The shortfall of hot dip galvanized in the Iranian market is thus naturally met by imports, mainly from the CIS, India and China. With the import volume of hot dip galvanized declining in recent months, the new uptrend in prices may be attributed to a fall in inventories in the local Iranian market. According to the Iranian customs authorities, Iran imported about 35,215 mt of hot dip galvanized coil in the first three months of the current Iranian year (started on March 21), while it imported 46,675 mt of the same material in the corresponding period of last year. Of course reports have been heard that some importers have booked large tonnages of hot dip galvanized from overseas sources; however, prices in the local market may continue to rise, as it normally takes a few months for newly ordered materials to arrive in the Iranian market.