In the local Iranian market 12-25 mm rebar is currently being transacted by local traders at $540-560/mt ex-stock Tehran, representing a drop of $20/mt compared with last week. Although global billet prices have risen in recent weeks, so far this increase does not appear to have influenced Iran's domestic rebar market.
On Wednesday, August 12, local steel producer Esfahan Steel succeeded in selling a few small batches of rebar via the Iran Mercantile Exchange (IME) at $530-550/mt ex-stock Tehran with 70-day delivery and for cash payment. On the same day Azarbaijan Steel offered a batch of 5,600 mt of 14-25 mm rebar via the IME at $520/mt ex-works; however, the material was not sold as buyers' bids did not exceed $510/mt.
Rebar prices in Iran have declined in the past week after indicating a rising trend in the previous two weeks. Local rebar demand has not been strong enough to keep rebar prices at last week's range of $560-580/mt. In fact, the global price increases registered by rebar and other finished steel products had encouraged local traders to hike their prices in the previous two weeks; however, as local demand for rebar is still not sufficiently strong, local traders were unable to maintain their prices in the abovementioned range for more than a few days.
A large part of local demand for rebar in Iran results from government-sponsored construction and infrastructure projects, most of which are suspended at present. The stagnation with regard to the governmental projects has had its origin in the June 22 presidential election and in the ensuing political tension. President Ahmadinejad's new cabinet has not yet been appointed and naturally any movement in relation to the governmental projects depends on approval by the new cabinet.Another major part of local demand for rebar results from housing construction activities (mainly carried out by Iran's private-sector); however, activities in this field have also been stagnant in the last few months.