The most recent ex-CIS offers to Iran of 5SP/PS and 3SP/PS billets of 100 x 100 mm - 150 x 150 mm size stand in a range of $1,250-1,280/mt CFR Iran's Caspian Sea ports. However, CIS suppliers have not yet started making offers to the market. Imported billet of CIS origin are being transacted in the Iranian market by local traders at $1,230-1,250/mt ex-Iranian ports (including customs duty etc.) - a price which is lower than the levels of fresh offers from foreign suppliers on account of the steady rise of steel prices in the global markets. Ex-stock billet prices in the local Iranian market have decreased by about $90-100/mt in comparison with 10-15 days ago when they stood in the range of $1,320-1,350/mt.
Iran imported about four million mt of billet in the last Iranian year (21.03.2007-20.03.2008) according to Iranian customs data. Annual demand in Iran, however, is two times this figure at eight million mt per year. The Iranian billet market could be described as being in a very critical situation due to the large gap between supply and demand.
There are about 35 private-owned rolling mills already operating in Iran with a total combined rolling capacity of about 10 million mt per year. Meanwhile, a rolling capacity of about five to six million mt is under construction by private-sector investors in Iran. Thus, in the near future the Iranian private sector will reach a total rolling capacity of 15 million mt. Meanwhile, no local production of billet is due to come on stream in the near future. Of course, some steelmaking projects have been initiated in Iran, both in the private and state sectors, but it will be at least two to three years they are completed.
Khuzestan Steel Co., which is the sole Iranian supplier of semi-finished products (capacity of 2.2 million mt per year), only supplies billet and other semi-finished products to state-owned rolling mills. At present, it does not supply any material to private-owned rolling mills.