HDG prices are dropping in line with other flat and long products in Iran in spite of some price fluctuation which happen frequently.
HDG coil in 0.5-1.00 mm thickness has already been transacted at $1,220-1,470/ mt ex-stock Tehran down from $1,250-1,540 mt registered two weeks ago and from $1,450-1,680 mt in early July when market was experiencing the peak level of prices . There is a price reduction of $30-70/mt compared to two weeks ago while the fall is even larger - i.e. $210-230 compared to early July levels .
Last Monday, Mobarakeh, as one of main suppliers of HDG in Iranian domestic market, sold HDG at $1,250/mt ex-work with delivery of 80 days to local traders .There are five main supplier of HDG in Iran while Mobarakeh is market leader, having an annual capacity of 200,000 mt for HDG and 100,000 mt for pre-painted galvanized coil . Other local suppliers have a capacity of about 100,000-200,000 mt per year but they are unable to produce at full capacity due to feedstock - i.e. cold and hot rolled coil, shortage.
Iran has an annual production of about 500,000 mt of HDG, which doesn't meet the market demand, which is at the level of 700,000 - 800,000 mt per year, and the shortage is mainly imported from CIS countries, India and China. The shortage in supplies encourage new investments in that field and also imports. According to Iranian custom house statistics, Iran imported about 300,000 mt of HDG in last Iranian year (March 21, 2007 - March 20, 2008).
Chinese origin HDG usually has lowest quality and prices than Indian and CIS origin materials, but their price is closer to that offered by Iranian producers. However, Russian and Kazakhstan materials have a price advantage due to a low sea freight of $20-25 per mt from their ports on Caspian sea. Meanwhile freight rates to Iranian southern ports are about $70-80/mt from Chinese ports and about $40-45/mt from Indian ports.