Overview of Iranian steel market and I-beam prices

I-beam prices in Iran have been undergoing some fluctuations in recent times. The rising trend which started a number of weeks back led prices to reach a high range of $930-1,280/mt for I-beam sizes of 140-270 mm by the end of October. However, these high levels were not able to hold out long against market circumstances, with the result that the market has seen a gradual decline from the start of November up to the present. Prices are already down to a level of $825-1,200/mt, showing a reduction of $80-105/mt from the late October levels. In early April this year, prices had soared to a peak range of $968-1473/mt; yet these strong levels only lasted a few days before a rapid decline began to be seen.

Just like other oil-exporting countries, Iran has accumulated significant deposits of hard currency over recent years due to the increase in oil prices. With these large quantities of capital, Iran has been able to launch many new development projects and, furthermore, the rising real estate prices in the country have reinforced the market demand for construction materials, in particular for steel and cement. During the first six months of the current Iranian year (21.03.2007-20.09.2007) Iran imported about five million mt of steel, and double this figure is expected to be imported for the whole of the current Iranian year. In comparison, in the last Iranian year (21.03.2006-20.09.2007) Iran registered total steel imports of just seven million mt. With Iranian mills having a combined annual capacity of approximately 10 million mt, and adding the 10 million mt of imports expected in the current Iranian year, we see that around 20 million mt of steel per year is supplied to the Iranian market. However, the high inventories of steel, backed up by a good import inflow, have helped prevent steel prices in Iran from climbing very high, though price surges are registered from time to time.

Of course, the UN sanctions have resulted in many difficulties, including higher costs for imports. Nevertheless, this situation will not seriously impact on market prices as long as the import volume fails to see any substantial decline.  

I-beam prices in Iranian market as of early this week.