In terms of value billet holds second place after petrol in the import data issued by the Iranian customs authorities. In the first four months (21.03.2008-20.07.2008) of the current Iranian year, Iran imported 1.2 million mt of semis (billet, bloom, slab, ingot) with a total CIF value of $924 million. The import volume for billet in the period in question does not show any significant change compared with the corresponding period of last year. The average value of imported billet (on CIF basis) in the given four-month period stood at $766/mt, according to Iranian customs.
Last week, CIS suppliers were offering billets at prices of about $880-900/mt CFR Iranian northern ports (Anzali, Noshahr, Amirabad, etc.). China, which had previously been supplying low quality billets to the Iranian market, are no longer in this market due to the Chinese government's cancellation of the tax rebate for billet exports. Iran now usually imports billet from CIS countries (mainly Russia and Ukraine) via its ports on the southern coast of the Caspian Sea; this route has the advantage of a low freight of $24-25/mt, but vessel capacity on the route does not exceed 7,000-8,000 mt. Large cargoes, on the other hand, have to be shipped instead to Iran's southern ports on the Persian Gulf at a far higher freight charge of about $70-75/mt.
The Iranian private-owned rolling mills, which in recent years have developed a total annual capacity of about 10 million mt, at present are using on average only about 30 percent of their capacity. These mills usually suffer from shortages of billet as they do not have enough financial resources for importing large quantities of billet under normal circumstances, while UN sanctions have placed further obstacles in the way of imports since early 2007. Nowadays Iranian mills or traders are obliged to buy billet (the same is true also in the case of other goods) with cash or through payment by letters of credit from non-Iranian banks, both of which methods place heavy financial pressure on the Iranian buyers. Recently the Iranian government decided to allocate bank credits of $2.2 billion for imports of billet by local rolling mills; however, no transaction has yet been announced in this context.