Iran exported a total of 6.36 million tons of finished and semi-finished steel products in the 10 months of the current fiscal year (March 21-Jan. 20) to register a 2.81% year-on-year decline, the Iranian Steel Producers Association declared in its latest report.
Semi-finished steel made up 3.97 million tons or more than 62.37% of the total export volume, down 26% YOY.
Billet and bloom had the lion’s share of semis exports with an aggregate of 2.51 million tons to mark a 15% decline YOY. Slab followed with 1.46 million tons, down 39% YOY.
Exports of finished steel products surged 102% YOY to reach 2.39 million tons.
Rebar was the main exported finished product with 1.29 million tons, registering a 201.87% jump YOY.
Following rebar were hot-rolled coil with 549,000 tons, up 12.04% YOY; beams with 209,000 tons, up 48% YOY; “other steel products” with 164,000 tons, up 152% YOY; coated coil with 150,000 tons, up 194% YOY; and cold-rolled coil with 32,000 tons, up 220% YOY.
Exports of direct-reduced iron decreased 11% YOY to 503,000 tons during the 10-month period.
Imports Down 52%
Imports of all steel products, except for billet and bloom, were down during the period compared with last year's corresponding period.
The ISPA report shows steel imports stood at 908,000 tons during the 10 months to Jan. 20, down 52.36% YOY.
Semis imports made up 27,000 tons of the total figure, down 39%. Billet and bloom imports went up by 18% to 26,000 tons, as slab witnessed a staggering 95% fall to reach only 1,000 tons.
Imports of finished steel dropped 53% YOY to 881,000 tons. The imports mostly included HRC with 285,000 tons, down 63.18%; CRC with 256,000 tons, down 56%; coated coil with 223,000 tons, down 35%; "other steel products" with 58,000 tons, down 15%; rebar with 36,000 tons, down 47.06 %; and beams with 23,000 tons, down 21%.
10% Growth in Production
Iranian steelmakers produced 38.25 million tons of products during the 10-month period to register a 10.04% growth compared with last year’s corresponding period.
Semi-finished steel made up 20.67 million tons of the total output, up 13% YOY.
Billet and bloom made up 11.71 million tons of all semi-finished production volume while slab output hit 8.96 million tons to register an 18% and 6% year-on-year rise respectively.
Exports of finished steel products surged 102% YOY to reach 2.39 million tons
As for finished steel, output increased 7% YOY to reach 17.57 million tons.
Hot-rolled coil had the lion's share of finished steel production with 6.57 million tons, up 2% YOY.
It was followed by rebar with 6.31 million tons, up 22%; cold-rolled coil with 2.08 million tons, up 7%; coated coil with 1.15 million tons, down 8%; beams with 839,000 tons, down 7%; and "other steel products" with 609,000 tons, down 13%.
Iran’s direct-reduced iron production is registering a healthy growth. It stood at 21.96 million tons during the 10 months, indicating an 18% rise YOY.
Semis Apparent Usage Increasing
According to ISPA, Iran's apparent steel usage—defined as production plus imports minus exports, sometimes also adjusted for changes in inventories—stood at 16.73 million tons for semis, growing 28%; and hit 16.05 million for finished products to drop 6% YOY.
Hot-rolled coil had the lion’s share of finished steel consumption as it reached 6.3 million tons, down 6% YOY. It was followed by rebar with 5.05 million tons, up 5% YOY; cold-rolled coil with 2.31 million tons, down 8% YOY; coated coil with 1.22 million tons, down 21% YOY; beams with 653,000 tons, down 18% YOY; and "other steel products" with 503,000 tons, down 29%.
As for semis, the use of billet and bloom grew 32% to 9.22 million tons, while that of slab rose 24% to 7.5 million tons.
DRI use was up 19% for the period to 21.46 million tons.
Iran aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets annual production capacity expansion to 55 million tons and 20-25 million tons of exports per year by 2025. Iranian steel mills have so far realized 30 million tons of the capacity target.
The country has been working to increase its iron ore processing capacity, including both DRI and hot-briquetted iron production to feed its steelmaking expansion target.
Impact of US Sanctions
UK-based analysts in Fastmarkets say the new round of US sanctions against Iran are expected to cut Iranian steel exports, gradually leading to lower Iranian steel output.
Although the move is largely directed at the country’s oil industry and banking system, it is still expected to aggravate the situation in the Iranian export steel market, which had already been struck by the previous set of sanctions imposed by US President Donald Trump’s administration in early August.
The latest round of sanctions was enforced in November.
Trump announced his decision to pull out of the nuclear deals Iran signed with world powers, including the United States, in May 2018.
Shipping problems are said to be the major issue at present.
Under the circumstances, Iranian steel exporters have had to cut prices significantly to attract customers and compensate for the risks involved in trade with the country.
According to Deputy Industries Minister and Chairman of Iranian Mines & Mining Industries Development & Renovation (IMIDRO) Khodadad Gharibpour, Iranian steel industry is an export-oriented one in that the country exports more than 40% of its steel output.
"I think that’s the key question for every Iranian steel producer because export is one of the most important ratios in their production because on the one hand consumption in Iran is not growing fast enough to feed all the nominal capacities coming up and on the other hand, you have not only sanctions form the US, you also have anti-dumping," Joachim Schroder, chairman of RCG Research & Consulting Group AG, told the Financial Tribune in an interview on the sidelines of the opening of the ninth edition of "Iranian Steel Market Conference", also known as ISMC 2019.
The European Union announced definitive anti-dumping duties on the import of hot-rolled coil from Iran and three other countries in October 2017.
"I think there are two ways of solutions. There are still markets in Africa and Southeast Asia, which have insufficient domestic production so there are some selective markets still open," Schroder said.
"That’s one way and the other way I think is to look for cooperation because the big asset of Iranian steel industries that are together with CRS [cold-rolled sheet] producers, they have the cheapest production cost and that is something where you can probably develop your business model; say you ship semi products like slabs or billets and then you cooperate very close with steelmakers because most of the countries don’t put any anti-dumping on semi products so that is a, not today or tomorrow, but that is a long-term strategy I would suggest for the big players in the market."
The two-day "ISMC 2019", which concluded on Jan. 30, gathered hundreds of people, including steel and mining industry veterans and government officials.
The annual event, a brainchild of Donya-e-Eqtesad Media Group, the parent company of Financial Tribune, discusses challenges and opportunities facing Iran's steel industry.
This year, perhaps, the challenging part that grabbed more attention was the new round of US sanctions imposed against the Islamic Republic with the aim of restricting Iran's trade with the world.
