MSC Targets 7m Tons of Flat Sales This Year

Mobarakeh Steel Company has set the target to sell 7 million tons of flat steel in the current fiscal year (March 2017-18), mostly in the local market, the company’s head of sales and marketing said.

“Iran’s largest flat producer MSC sold 2.18 million tons during the first four months of the current fiscal year (March 21-July22), up 19% compared to last year’s corresponding period. Domestic sales comprised 1.89 million tons of the total output, up 53% year over year,” MSC’s website quoted Mahmoud Akbari as saying.

Exports for the four-month period, mostly made up of slabs, were down 64% to 290,000 tons. Shipments of MSC’s primary product, hot-rolled coil, were down 83% to 104,000 tons.

“Mobarakeh’s priority has always been and still is supplying the local demand, but this does not mean putting an end to exports altogether. Gaining recognition and acceptance in international markets is no small feat and must be pursued. Moreover, capacity exceeds demand for certain products such as slabs and our only choice is exports,” he added.

Akbari said MSC is aiming to increase the production of HRC and slabs, while maintaining the current production capacity of cold-rolled and coated coils.

The company’s finished prices are bound to increase further as market dynamics change.

Electrode prices have surged from $2,000 to about $20,000 due to supply scarcity and heavy melting scrap has jumped to about 12,700 rials ($0.33) per kilograms. Jolts in Khouzestan Steel Company’s ingot quotes have also caused iron ore prices to rise accordingly.

MSC’s expansion plans are moving on a fast track. Its 5-million-ton per year pellet-making plant was inaugurated in Khorasan Razavi’s iron-rich Sangan region last week with a 10-trillion-rial ($263.15 million) investment. The project took 36 months to be completed.

According to MSC Managing Director Bahram Sobhani, the company’s current capacity stands at 10.3 million tons of crude steel and 11.8 million tons of direct-reduced iron per year.

Utilizing MSC’s capacitates to the full requires 17.5 million tons of pellets per year and the new 5-million-ton capacity, alongside 3.5 million tons of external purchases and 7.2 million tons from previous plants ensures MSC’s sustained output.

The capacity expansion of MSC’s subsidiary, Saba Steel Complex, from 700,000 tons per year to 1.6 million tons is also scheduled to be completed soon, “making Mobarakeh even more capable of meeting demand for flat products”, Akbari said.

The flagship producer took control of the large-cap Mines and Metals Development Investment Company back in mid-July by acquiring a 37% stake in it. MMDIC owns large stakes in Iran’s major iron ore producers, effectively increasing MSC’s potential influence on price determination for the long-term contracts for iron ore and pellet, as well as on export and other policies.

Together with its subsidiaries, MSC is the largest flat steel producer in the Middle East and North Africa region, and Iran’s largest steelmaker, supplying 20% of the region’s steel demand and accounting for 1% of Iran’s GDP.