Debar prices see continued stability in Iranian market

The Iranian debar market has been stable for a very long time now, providing a contrast with the rapid rise seen for other products such as I-beam in 2006. There are many rolling mills currently producing debar in Iran, over ten producers with some of these from the private sector. Significant investments have been made in mills producing debar, even in remote provinces of Iran. In 2006, CIS-origin billet in particular was used in debar production due to its low price. Such provincial debar producers are nearer to the regional markets and so are able to deliver to those markets without having to pay out high freight charges. On the other hand, investments in debar-producing plants are lower than those required for integrated steel mills, and they are also up and running sooner, i.e., within two to three years. These are among the reasons which have contributed to the stability of the debar market in Iran. In addition, the Iranian authorities have allocated bank loans equivalent to approx. $80-100 million to rolling mills for the importation of semi-finished materials (billet) from the CIS countries and also from China. The production volume is able to meet the market demand and sometimes even manages to surpass it– thus explaining the price stability of recent months. Prices of debar in the Iranian market are currently at around $680-730/mt ex-warehouse, which is even down on last summer by about $50. However, the lower activity levels of the winter season are behind this drop. Nonetheless, the price of debar in Iran is still higher than the price worldwide – by about $100-150. In the current period, we observe that some rolling mills are experiencing difficulties in selling their debar at the Tehran metal exchange market, due to incipient stagnation in the local market. However, a pick up is expected with the coming of spring and the seasonal market renewal, with general price stability continuing due to the above-explained reasons. Of course, we may see some fluctuations in domestic prices, but these will not be significant, especially if the prices of billet from China and the CIS countries remain stable. Moreover, new plants which are due to come on stream in the near future, in addition to other development plans, will help to ensure a stable debar market in Iran for the coming spring and summer seasons.