Nobody buying in Iran’s declining billet market

CIS billet is currently being offered at $360-365/mt CFR Iranian northern ports for production in April and shipment in May. Prices stood at $370-375/mt a week ago and at $400-410/mt two weeks ago, both on CFR Iranian northern ports basis. CIS billet suppliers started to reduce their offers for Iran just as for other markets when the latest price decrease surge came into being in mid-February. Most market participants think that the falling billet price trend in Iran will continue during the coming weeks. Billets, as with other materials, usually have a price higher when imported into Iran than when imported into neighboring countries in the Persian Gulf. The UN sanctions against Iran's uranium enrichment program has entailed extra banking and financial costs for any cargo to be imported into Iran, which is one of the biggest customers for CIS billet. Meanwhile, a lot of foreign traders have abandoned the Iranian market due to the UN measures or their own governments’ restrictions against business transactions with Iran. Iran’s rolling mills require a large volume of billet (about 10-12 million mt yearly) while Iran was unable to import more than four million mt in a peak year such as the last Iranian year (21 March 2007-20 March 2008). The decline in billet prices in recent weeks in Iran has had a strong negative impact on the transaction volume, as there is a general reluctance to place orders when prices are on the way down. It goes without saying buyers of billet especially traders will have to bear some losses at the current time if they intend to clear their stocks. Nevertheless, it is still very difficult to sell any material in a falling market; in Iran as in other markets prices are coming down and everybody is a seller while no buyers can be found.