Iran's domestic rebar market has been fairly stagnant in the current week due to public holidays (on Tuesday and Wednesday) announced by the government as thick clouds of dust spread across much of the country. Against the background of this stagnant market, some price reductions have been seen in the free market.
12-25 mm rebar sizes, for which demand is largest in the Iranian rebar market, are currently at a price level of $570-590/mt ex-stock Tehran, down from $580-600/mt the week before. The Iranian rebar market had started to trend upwards according as the political and social unrest which followed the June 12 presidential election subsided; however, the rising market movement has come to an end in the current week in the context of the stagnation caused by the abovementioned holidays.
The Iran Mercantile Exchange (IME), which is the main sales channels of state-owned steel plants in Iran, has been closed since last Monday, causing a reduction in the number of rebar transactions as the big traders usually buy material from the steel plants through the IME and then distribute the material in the market.
In the last formal rebar booking registered at the IME, on July 5 a batch of ready stock 14-25 mm Turkish rebar was sold at $525/mt ex-stock Iranian southern ports. Meanwhile, a batch of 10,000 mt of 14-25 mm rebar was offered by Iranian state-owned rolling mill Azarbaijan Steel at $562/mt ex-works with 17-day delivery; however, customers were not willing to bid more than $500/mt ex-works and so no transaction took place.
Iran's total designed rebar rolling capacities should be sufficient to meet the country's needs and also to allow export of surplus production. Private sector rolling mills in Iran have a combined capacity of 10-12 million mt per year, while the state-owned mills have a total annual capacity of 3.5-4 million mt. However, the shortage of billet in the Iranian market forces local mills to operate at below capacity. Thus, the resulting shortfall in rebar supplies has to be imported from abroad, e.g. from the CIS, China and others. Iran imported about 174,500 mt of rebar in the first two months of the current Iranian year (started on March 21, 2009).