Rebar prices decline strongly in stagnant Iranian market

In the local Iranian market, the latest transactions for 12-25 mm rebar were concluded in a price range of $1,350-1,400/mt ex-stock Tehran for immediate delivery - a range which is about $35-40/mt less than last week and about $90-110/mt less than at the begining of July. Rebar prices are continuing to drop down due to the fall of billet prices in the global markets, while, in addition, local demand in Iran is not so strong at the present time. Expectations of lower prices have intensified the stagnation in the local market, with the result that local suppliers of rebar have not been able to sell their products in recent weeks .
 
For about three to four weeks now there has been a stagnation in the Iranian long products market, especially in the rebar market. Rebar prices, which had been soaring steadily in recent months, reached their peak levels in the last days of June, when they stood in a range of $1,425-1,500/mt ex-stock Tehran. The current downtrend started in early July when signs of weakening demand gradually began to emerge in the local market.Although we are currently in the height of the summer construction season in Iran, we should not forget that most contractors have already bought their requirements, which helps explain why market demand has been declining significantly in recent weeks.
 
The global billet price reduction which started two to three weeks ago has also reinforced the declining trend in the rebar market. Currently, most local traders have stopped purchase of rebar from both local and foreign sources, as the global billet prices have not yet begun to stabilize.
 
Both last week and during the current week, a large volume of rebar supplied by Esfahan Steel Co., as well as Chinese rebar offered by the Iranian Ministry of Commerce, failed to find any buyers at the Tehran Mercantile Exchange (TME). Only a small quantity of rebar (about 1,300 mt) was sold lately by Esfahan Steel at about $1,427/mt through the TME - a price which is higher than the market level.
 
Finally, Iran imported about 1.2 million mt of rebar during the last Iranian year (21.03.2007-20.03.2008) while it imported 370,000 mt of rebar in the first three months (21.03.2008-20.06.2008) of the current year, according to Iranian custom house statistics.