Oxin Steel Gets Go-Ahead to Set Up Slab Plant

Iran’s sole heavy plate producer plans to establish a slab production plant with a capacity to produce 1.2 million tons per year to expand the output of its special-grade steel products.

“We must boost our output of wide plates, but the slab we currently use is not good. In fact, we have to use 2.2-meter-wide slabs instead of the 1.5 meters we use right now,” says Khouzestan Oxin Steel Company’s Managing Director Abdolreza Mahmoudpour.

The new plant will require some 15 trillion rials ($396 million) of investment expected to be made by the private sector.

Mahmoudpour noted that Oxin is currently holding talks with Danieli, the Italian provider of steel production technology, among other potential foreign candidates, for establishing the plant.

Currently, about 80% of Oxin’s required slab are sourced from domestic producers Mobarakeh, Khouzestan and Hormozgan steel companies, with a further 20% (used for API grade plate) being imported.

“Oxin Steel has been designed to use 90% of its capacity for manufacture of steel used by shipbuilders, large-diameter pipe makers and for use in the oil and gas industries. But about 80% of our current capacity are allocated to structural steel output and that’s because we lack a slab plant of our own,” Mahmoudpour said.

Located in the southern Khuzestan Province, Oxin is Iran’s biggest producer of heavy plates. It is the only local producer of heavy wide steel plate, which can produce it in widths of 1,100-4,500 millimeters with a thickness of 8-150 mm. It produced about 650,000 tons of steel products in the last Iranian year (March 2016-17). About 30,000 tons of this were exported, mainly to Germany, Italy, Belgium and the Netherlands.

The Cabinet approved Oxin’s plans for setting up the new plant last week, IRNA reported. The new type of slab will be used for producing wide plates used in the manufacture of API-grade oil and gas pipelines.

However, the catch to the agreement is that the government has mandated Oxin to develop the railroad infrastructure in the area to transport its products to users, which it has accepted.

Oxin’s expansion plans, coupled with Mobarakeh Steel Company’s policy of focusing on local downstream manufacturers’ demand, could turn the Khouzestan-based steelmaker to Iran’s most important flat exporter.