The latest transactions of Iranian origin 12-25 mm rebar sizes were concluded by local traders at $580-600/mt ex-stock Tehran - a price range which would have appeared incredible a few weeks ago. One week ago the price level for the material in question was $600-630/mt and while it stood at $625-655 in mid-January. The current declining trend in Iran's rebar market has been ongoing since the middle of December 2008 when 12-25 mm rebar sized were at a price level of $740-770/mt ex-stock Tehran; however, over the period in question the speed of the declining movement has seen frequent variation.
The falling trend in the Iranian domestic rebar market has not stopped yet. Many market participants expect further reductions, down to a price of around $500/mt, i.e. closer to the global price levels of rebar.
On February 15, Chinese rebar was sold through the Iran Mercantile Exchange (IME) at about $514/mt on ex-stock Tehran basis for immediate delivery. On the same day, Esfahan Steel, one of the main state-owned suppliers, sold about 3,000/mt through the IME at about $555/mt ex-works for seven-day delivery. Meanwhile, Azarbaijan Steel, another state-owned rolling mill, failed to sell any of the rebar it offered on the same day as the prospective buyers only bid around $498/mt.
Most domestic privately-owned rolling mills have reduced their outputs due to the low prices in the local market, as they fear they will incur losses if they stock material. In comparison, state-owned steel plants have not reduced their outputs in recent months even though their situation is not any better in spite of the financial support they receive from the government.
High stocks of rebar have been piled up at the ports by importers and by the government. On the other hand, high inventories have also accumulated at state-owned steel plants or rolling mills due to weak demand. Most traders expect further price reductions in the coming days or weeks and, consequently, are holding back from placing any large orders at present.