Billet price was downward during last week in Iran. Size 150 mm dropped by IRR 150,000 per tonne to IRR 16.9 million per tonne on truck in Anzali including 8% VAT and custom duty.

Domestic billet size 120 mm also experienced the same decline in price to around IRR 16.25 million per tonne on truck including VAT but there was no interest in buying. Domestic production billet size 150 mm also priced at IRR 16.5 million tonne to IRR 16.7 million per tonne including VAT, but no buyer in the market.

Import offers from CIS are USD 520 per Mt cfr Northern Iranian ports but are not interesting for the buyers as fluctuations in ex-rate and some problems in transferring money would increase cost price for importers. Besides, domestic supply level is enough at the moment and there is no need to import. Actually, if import supply level stop completely for any reason, domestic mills can support market with higher production.

There are two reasons that importing billet has not stopped yet, including:

1. Import payment term which is 30% prepayment and the rest on shipment time. But for buying form domestic market, it should be paid 100% in cash and accepting possible risks about delay in delivery or quality of the cargo.

2. Price of imported billet at USD 520 per MT cfr Northern ports is yet profitable for traders, but buying from domestic market has no profit for them. Therefore, billet import level during current Iranian year ( 21 March-01 September) has been around 98.452 MT.

3. For increasing investment level In domestic billet production despite import market , we need changes in payment terms and purchasing procedures from mills or IME( Iran Mercantile Exchange). This needs changing policies at IME to avoid import parcels have a competitive strength.