Hot rolled coil prices have jumped up again during the current week in Iran's domestic market. Local Iranian traders are already offering 2-8 mm thick hot rolled coil at $1,015-1,070/mt ex-stock, but most of them are not selling any flat products at present but are looking forward to next week's developments with a hope for higher prices. Hot rolled coil was at a price level of $970-986/mt last week in the Iranian local market but a rising trend has been in evidence since early this week following the sale of large quantities by Mobarakeh Steel Co., the main supplier of hot rolled coil in Iran.
As Iran's main hot rolled coil supplier with an annual production output of five million mt, Mobarakeh Steel Co. naturally plays a major role in the market and has a great influence on prices. The steelmaker sold 101,600 mt of hot rolled coil at $970/mt through the Tehran Mercantile Exchange last Monday, after having kept its sales closed over a long period prior to that. Mobarakeh had not carried out any sales of large quantities since the Iranian New Year holidays which ended in early April.
During recent weeks up until last Tuesday Iranian traders had been selling hot rolled coils in the local market at prices lower than global levels. The traders usually base their prices on Mobarakeh's levels while the actual prices in the free market are generally about $40-100/mt higher than Mobarakeh's official prices. Even the prices of imported material usually take Mobarakeh's prices as a reference point.
The Iranian authorities recently decided to reduce the customs duty on some finished steel products, including hot rolled coil, a move which had long been sought by many end-users and also by pipe and profile producers. As a result, the customs duty on hot rolled coil has been reduced from 10 percent to four percent but this does not seem to be having a strong influence on market prices, especially as global prices are soaring so rapidly at present and easily nullify such government measures.