I-beam prices are coming down in the local Iranian market following the rapid collapse seen in the country's rebar market. 140-180 mm I-beam sizes are currently changing hands at $730-800/mt ex-stock Tehran for immediate delivery and cash payment. The same I-beam sizes had stood at a price level of $750-820/mt two weeks ago and at $780-835/mt three weeks ago, in the market in question.
The declining trend in Iran's domestic I-beam market has been evident since early December 2008, but has experienced an intensification since the middle of December. Rebar usually provides an early indication of the market trend which other long products will follow; indeed, in recent weeks, I-beam and other long product prices started to decline in the local market following the example of rebar.
The falling trend has forced local traders to withdraw from the country's formal sales channel for I-beam, i.e. from the Iran Mercantile Exchange (IME). There were no customers for the imported I-beam offered by the Government Trading Corporation of Iran (GTC) - which is affiliated to the Ministry of Commerce - through the IME on December 31, 2008.
In order to control prices the Iranian government imported a very large volume of long products in 2007-2008 (especially I-beam and rebar). In recent weeks the GTC supplied imported I-beam and rebar through the IME; however, there has been no demand (or only very weak levels) for imported I-beam due to the stagnation of the market and also due to the low quality of some of the imported materials. Last Wednesday the GTC supplied Saudi Arabian and Chinese origin I-beam through the IME but no deal was concluded for these materials even though the prices involved were lower than those for Iranian origin I-beam.
Last Wednesday, Esfahan Steel managed to sell a small volume of I-beam (about 1,200 mt) at around $723/mt with 50-day delivery and for cash payment through the IME. On the other hand, there was no buyer for Saudi Arabian and Chinese I-beams which were offered on Wednesday at, respectively, $675/mt and $705/mt ex-Iran's southern ports.