CIS suppliers were offering 100 x 100 mm to 150 x 150 mm billets in a price range of $440-450/mt CFR northern Iranian Caspian Sea ports in the last days of December 2008 - representing an increase of $30-40/mt compared with mid-December levels. The CIS suppliers managed to hike their prices in the final days of last year on the back of their production cuts; however, it is not clear whether they will be able to maintain the increased price levels after the New Year holidays. Indeed, no significant transaction has yet been be finalized by Iranian buyers at the raised prices.
CIS billet has also been offered by local traders in Iran at $485-490/mt ex-Iran's northern ports, i.e. down about $40-50/mt from mid-December. The abovementioned price hike by CIS suppliers has not yet influenced CIS billet prices as offered by local traders in Iran's domestic market, which have been on a declining trend in the last few weeks.
Local private sector billet producers have also reduced their prices in recent weeks. Iranian origin billet is currently standing at a price level of $500-520/mt ex-works - i.e. higher than the CIS billet prices.
The pervasive stagnation in the Iranian domestic finished steel markets has already caused rebar and I-beam prices to drop down substantially, leading the way for other finished steel products. Weak demand for finished steel, especially rebar and I-beam, has caused Iranian rolling mills to reduce their production, meaning lower demand for billet in the local market. This reduced demand helps explain the falling prices of billet in Iran in recent weeks while global prices were on a gradual rising trend.