In the Iranian domestic market local production 12-25 mm rebar sizes are currently being transacted by local traders at $535-560/mt ex-stock Tehran while some stockists who seek to cash in their material are selling rebar at lower prices. Meanwhile, Chinese origin rebar is being sold at a lower price than Iranian material in Iran.
Last week in the Iranian domestic market 12-25 mm rebar sizes had been standing in a price range of $560-590/mt, while two weeks ago prices for these products were in a range of $588-618/mt. The three-day holiday in the current week in Iran has intensified market stagnation and resulted in fewer transactions. Local traders seeking to bring in cash are likely to sell their rebar stocks at lower than the current price range given above, and this is another factor which may bring prices down further in the coming week.
Iran is now drawing close to the long Iranian New Year holiday which begins on March 20. Ahead of the holiday there is usually strong demand for steel and, consequently, big transactions - also due to the fact that increased prices are expected in the New Year period on the back of high inflation. However, ahead of this year's New Year holiday no movement is observed in the market and no transactions are seen. One trader described the existing situation as a "winter market" - i.e. with stagnation just like in wintertime in the market even though spring is now practically upon us and activity levels should be far higher.
Local private sector rolling mills in Iran, which have a combined rolling capacity of about 12 million mt per year, usually complain about cheap Chinese rebar and also about the pricing policies of the state-owned plants. Both foreign suppliers and the local state-owned steel plants constitute powerful competition for the local rolling mills. The foreign suppliers, mainly from the CIS and China, have been directing a flood of cheap rebar towards the Iranian market, while the low prices of the state-owned steel plants have a direct influence on the market trend. The private-sector rolling mills usually accuse both these parties of dumping materials in the local rebar market.