CIS suppliers of billet have been steadily hiking their quotations for the Iranian market in recent weeks. The latest quotations for CIS billet have been at $475-485/mt CFR Iranian northern ports for production in October and delivery in November or December. Meanwhile, there have been reports that CIS suppliers have quoted even higher prices for Iran; however, these reports have not yet been confirmed by any reliable source.
With global developments favoring a new rising trend for billet and other finished products in recent weeks, most Iranian buyers would like to purchase CIS billet but, as usual, their shortage of financial resources does not allow them to place large orders at present. The strict controls on lending by banks imposed by the Iranian government in recent months have also resulted in reduced new orders from Iranian buyers.
On September 12, a batch of ready stock billet produced by Russian mill Ural Steel was sold via the Iran Mercantile Exchange (IME) at $461/mt ex-stock Iranian northern port of Anzali. Meanwhile, major local supplier Khouzestan Steel is offering billet at about Rials 4.50-4.80 million per metric ton (around $450-480/mt) ex-works.
Iranian rolling mills prefer to buy CIS billet via Iranian northern ports on the Caspian Sea as most of the mills are located in the northern part of the country; furthermore, there is a sea freight charge of only about $22-25/mt from the Russian port of Astarakhan on the Caspian Sea to the Iranian Caspian Sea port of Anzali, compared to an overland freight charge of about $30-40/mt if the Iranian rolling mills purchase billet from Khouzestan Steel. The other advantage of CIS billet is that some European trading companies which sell CIS billet can provide financial facilities for Iranian buyers through usance letters of credit, whereas Khouzestan Steel usually sell its products for cash payment.