Local traders in Iran are currently booking I-beam of 140-180 mm sizes at a price of $985-1,030/mt on ex-stock Tehran basis, down from $1,010-1,050/mt early last week. As the main local supplier of I-beam, Esfahan Steel Co.'s sale policy and prices have being exerting a very strong influence on the market. Last week, this producer sold a large quantity of I-beam through the Tehran Mercantile Exchange after having kept its sales closed for over a month. Last week's sale consisted of around 130,000 mt of I-beam at a price of $1,000/mt ex-works. This strong influx of I-beam supplies from Esfahan Steel caused the market price movement to switch from an upward to a downward direction.
Another state-owned mill is Iranian National Steel Industrial Group but it only produces I-beam of 140 mm size. Recently, Arian Steel Co., a privately-owned rolling mill with an annual capacity of 500,000 mt commenced production of I-beam. Arian Steel already supplies some I-beam sizes (140 and 180 mm) to the market, but its current market share is not sufficient to exert an influence on the market. Meanwhile, a few other mills which will be able to produce I-beam are at present being constructed by the private-sector.
Iran imported about 1.2 million metric tons of I-beam in the last Iranian year (21.03.2007-20.03.2008), and an even higher volume of imports may be expected in the current Iranian year due to the boom in construction projects, as well as due to a possible reduction of customs duties by the Iranian authorities. For a few months now there have been discussions between different groups in Iran in favor of a reduction in the customs duty for I-beam and some other long and also flat products. I-beam is subject to a customs duty of four percent at present, while the Iranian government recently reduced the customs duty on HRC from 10 percent to four percent.
Iranian traders import I-beam mainly from the CIS, China, Turkey and also from some European countries. However, the import situation is gradually deteriorating as UN sanctions have already blocked international transactions via Iranian banks, thereby forcing Iranian traders to handle imports by cash payment instead of by letter of credit.