The rebar market in Iran has shown some sharp fluctuations in recent days, in line with the general uptrends in the long and flat product markets in Iran. Rebar prices for 8-25 mm sizes have already reached a level of $900-935/mt ex-stock Tehran in the local market, while the prices of these products were in a range of $820-830/mt just one week ago.
The Iranian steel market, which had been stable during the last few months when it just moderately reflected the rising global trend, experienced a sharp upward price movement during the current week. In this context, some traders even halted their sales due to their expectations of higher prices.
The long Iranian New Year holidays, which begin on March 20 and last for 15 days, usually inspire customers to buy their requirements for the coming months ahead of the holidays. This is especially because everybody expects that high inflation (about 25-30 percent) will influence commodity prices after the country's New Year holidays. This rush to complete purchases usually creates strong demand in the last weeks of the old year which exceeds existing supplies. Most traders and steel experts had been expecting this situation for the past couple of months, with some of them even foreseeing prices of over $1,000/mt.
On the other hand, the third resolution of the UN Security Council aimed at the imposition of stricter sanctions against Iran's uranium enrichment project, is currently going through the last steps of approval. Naturally, the resolution and its expected heavy economic impact will severely shake Iran's steel market given its strong dependence on imports. Meanwhile, global steel prices have been soaring continuously during January and February this year. This inevitably influences the prices of finished products such as rebar and others, especially when most Iranian privately-owned rolling mills are dependent on imports of billet from the CIS.
Iranian state-owned steel plants (including Esfahan Steel), which hold a majority share in Iran's long products market,,are also following the market trend, increasing their prices substantially during recent days. Esfahan Steel Co. has been selling rebar at a price level of $850/mt ex-works with a delivery period of 50 days during the current week. The prices of other state-owned mills are even higher at present.