The Iranian parliament has imposed a new duty on steel imports, likely to be effective from September this year, according to the ICANA news agency, which is affiliated to the parliament.

The duty is Iranian Rial 100,000/mt (about $25/mt) of imported material and will be imposed on all steel products during Iran's sixth development plan, running from 2017 to 2023. The duty will cover billet, beam, different strips, tubes, pipes, stainless steel and scrap.

The duty will be imposed in addition to all import taxes already in place and the funds raised from it will be used for the development of the country's national railway system.

The new duty will almost certainly cause an increase in production costs for downstream industries, said Amirhosein Kaveh, secretary of the Iranian Syndicate of Steel Pipe and Profile Manufacturers. There is already considerable pressure on the Iranian pipe industry at the moment and a part of capacity is idle as a result of a slump in demand and production costs.

The Iranian government is following a highly protective policy for the upstream steel industry and this has increased production costs for downstream users, Kaveh said. The new duty would mark the third increase in import costs since January 2016. He also said that the syndicate has asked the government to cancel this new duty.

At the moment import duties are at 15% for semi-finished products; 20- 26% for flat products (excluding stainless steel) and 26% for most long products, including I-beams and H-beams.

The import duty on scrap is 4%; the "lowest possible" according to Iranian customs.