Iran's SKS Banks on Exports to Ramp up Production

Iran’s Kish South Kaveh Steel, otherwise known as SKS, which entered the merchant billet market at the end of 2015, intends to reach higher utilization by focusing on exports.

During the first nine months of the current Iranian year (started March 20, 2016) SKS produced 393,874 tons of billet, 35% of which were sold to Jordan, Malaysia, India, Morocco and Thailand, Metal Expert learnt from a company representative. 

In value terms, the export shipments stood at $56.7 million.

Taking into account SKS’s production capacity of 1.2 million tons per year, the average utilization rate over the period under review is estimated at less than 50%. The company, however, intends to ramp up steel output owing to foreign sales. 

“We hope to export $100 million in terms of value by the end of current Iranian year. This is SKS’s great target. Our ultimate goal is to enhance the export share of billet to 80% from the current 35%,” the company source said.

SKS has promising export potential, as it takes advantage of proximity to Bandar Abbas Port and consequently lower transportation cost. 

Logistics is one of the sensitive issues for Iranian steel producers, which restricts their export performance.

SKS continues to implement its investment program. It plans to double its capacity to 2.4 million tons per year under the second phase of expansion in Q1 2018.