Iranian steelmakers have set a record by exporting more than 4.1 million tons of steel products valued at about $7 billion in the last Iranian year (March 2015-16), which shows an over 4% rise compared to the previous year, said Mehdi Karbasian, deputy minister of industries, mining and trade on Sunday.
This is while Karbasian, who also heads the Iranian Mines and Mining Industries Development and Renovation Organization, had previously predicted that steel exports would reach a record high of 3 million tons by the yearend.
"The achievement (last year's record exports) shows that Iranian producers managed to weather the steel crisis amid faltering demand in the domestic construction sector and China and Russia's dumping policies glutting the global markets," he was quoted as saying by IRNA.
The official pointed to higher tariffs set on steel imports this year and the relatively unchanged energy prices as the main incentives for steelmakers to embark on exports.
Iran aims to become the world's sixth largest steel producer as per its National Vision Plan (2005-25), which stipulates the production of 55 million tons of crude steel per year.
Experts believe that for the ambitious target to materialize, the domestic industry should export close to 20 million tons of the production figure every year. However, they contend that the current domestic infrastructure does not allow for exports of more than 7 million tons per annum.
> Iron Ore Prices on the Rise
Iron ore prices have soared above $70 per ton, as Chinese steelmakers ramped up production to take advantage of bigger profit margins that have boosted demand.
Consequently, Iran's iron ore prices grew by over $2.54 to $57.2 per ton last week, according to Metal Bulletin.
The global prices are the highest since January 2015. The steelmaking material has rebounded 94% since bottoming at $38.30 in December. The main boosting factor behind the new record prices were rebar futures, which jumped for the fourth straight day in the Shanghai Futures Exchange by 6.1% to $424 per ton–their highest since 2014.
The raw materials' gains in 2016 stand in sharp contrast to the previous three years, when a slowing Chinese economy hammered demand and prices, spurring a global glut. This year, Chinese policymakers have talked up growth and added stimulus, presiding over a revival in the property market that has boosted the outlook for steel consumption, Bloomberg wrote.
“You’ve got a tight market, you’ve got momentum, and you’ve got this fundamental driver for steel in the government boosting the infrastructure and housing sector,” said Chris Weston, chief market strategist at IG Ltd. in Melbourne.
Mills in China, which make about half the world’s supply, have increased output to a record high as property prices in bigger cities jumped and higher steel prices improved margins, reversing a squeeze from last year. Crude steel production soared to 70.65 million tons in March.
