Iranian steelmakers have achieved significant growth in exports, latest data released by the Iranian Steel Producers Association show.
A total of 4.06 million tons of semi-finished steel products were exported from Iran in the first seven months of the current fiscal year (March 21-Oct. 22), up 27% compared with the previous year’s similar period.
Billet and bloom had the lion’s share of semis exports with an aggregate of 2.72 million tons, 11% higher than the previous year’s corresponding period.
Slab exports amounted to 1.34 million tons during the period, up 80% year-on-year.
Exports of finished steel products grew by 38% to 1.86 million tons during the seven months.
Rebar accounted for the largest portion of finished steel products exported from Iran during the period, with 1.31 million tons. The total volume of Iran’s rebar exports experienced a 57% growth compared with the same period of last year.
Beam exports amounted to 75,000 tons during the period under review, down 21% YOY.
About 104,000 tons of L-beam, T-beam and other types were also exported from Iran during the period, unchanged from the corresponding period of last year.
Hot-rolled coil exports amounted to 291,000 tons, registering a 24% growth compared with the year before.
Cold-rolled coil with 11,000 tons registered a 56% decline year-on-year and coated coil with 67,000 tons, up 29% YOY, was the other finished steel product exported from Iran.
Exports of direct-reduced iron increased by 279% YOY to 698,000 tons, ISPA figures show.
DRI, also known as sponge iron, is produced from direct reduction of iron ore in the form of lumps, pellets or fines by a reducing gas. It can be processed to create wrought iron.
Iran and India are the world’s biggest producer of DRI.
Decline in Imports
Imports of finished steel decreased by 1% YOY to 479,000 tons during the same period.
The imports mostly included HRC with 84,000 tons, down 53%; CRC with 204,000 tons, up 66%; coated coil with 137,000, up 2%; L-beam, T-beam and other types with 26,000 tons, up 8% YOY; rebar with 19,000 tons, up 27% and beam with 9,000 tons, up 29%.
Semi-finished steel imports made up 3,000 tons of the total import volume, down 25% YOY.
Iran imported 1,000 tons of billet and bloom in the period, down 67% YOY. Slab imports stood at 2,000 tons, up 100% from last year's same period.
Iran did not import DRI during the period under review.
Output Hit by Power Restrictions
The ISPA data show a marked decline in domestic steel production during the period under review.
Iranian steelmakers produced a total of 15.77 million tons of semi-finished products during the period, down 11% year-on-year.
According to ISPA, billet and bloom made up 9.33 million tons of total semi-finished production, down 15% YOY.
Slab output reached 6.44 million tons to register a 5% decline year-on-year.
The output of finished steel decreased by 8% YOY to 11.03 million tons.
Long steel products had a 6.29 million-ton share in the output of finished steel products, posting a 3% decline compared with the similar period of last year.
Rebar production stood at 5.14 million tons (down 3% YOY). It was followed by beams with 697,000 tons (down 9% YOY) and L-beam, T-beam and other types with 469,000 tons (unchanged from the corresponding period of last year).
Production of flat steel with 4.74 million tons registered a 13% YOY decline in the seven-month period.
Hot-rolled coil made up 4.66 million tons of the production in this category, showing a 12% decline, followed by cold-rolled coil with 1.41 million tons, down 12% and coated coil with 860,000 down 5% compared with last year’s corresponding period.
Iran's output of direct reduced iron stood at 17.38 million tons during the period under review, down 4% YOY.
The decline in steel output is due to the power outages and restrictions imposed on steelmakers in summer.
In a letter to the Supreme National Security Council, ISPA has put steel mills’ losses due to power outages at $6 billion from the beginning of the current Iranian year (March 21) to Sept. 22.
According to ISPA, 82 complete days of production were lost during the period due to power outages and 300,000 direct and indirect jobs were lost or restricted, the news portal of the association reported.
Summer demand caused severe power and water shortage in the past months in most regions, resulting in blackouts and dry taps.
Electricity consumption on June 20 surpassed 62,000 MW.
The new record came as high temperatures nationwide drove general electricity consumption to new heights, prompting authorities to prioritize domestic users over industries in supplying power.
As the manufacture of steel and related products is an energy-intensive process, steel and cement factories were subsequently restricted by the Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) and have been only allowed to work at a fraction of their capacity within specific hours of the day.
The abrupt ban on the two key sectors created shortages of steel and cement in local markets and prices increased overnight, creating new problems for most construction sectors.
Rasoul Khalifeh-Soltani, the head of Iranian Steel Producers Association, said at the heat of the blackouts that the power outages shut down 85% of steel production.
Deputy Industries Minister Saeed Zarandi recently estimated the losses inflicted by power outages on steel mills (only those falling under the Iranian Mines and Mining Industries Development and Renovation Organization) to have reached $235 million a week.
Iran is pursuing the target of becoming the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets an annual production capacity expansion to 55 million tons and 20-25 million tons of exports per year by 2025.
“To achieve the goal of 55 million tons of annual steel production capacity, we have a shortage of at least 5,000 megawatts of electricity,” the deputy minister was quoted as saying by Mehr News Agency.
Noting that production conditions were satisfactory until the third month of the current fiscal year (June 22-July 22) before facing the challenges of electricity supply and power outages, Zarandi said, “In the past three months due to a lack of electricity supply to production units, especially in the cement and steel sectors, we bumped into problems.”
According to Tavanir Spokesman Mostafa Rajabi-Mashhadi, all power restrictions for industries were removed as of Sept. 23.
Appreciating the good cooperation of steel industry this summer, he announced the end of electricity supply restrictions for the industry.
“This summer, a series of challenges such as unprecedented drought made it difficult to provide sustainable electricity to all subscribers, so given the priority of electricity supply to households and the public sectors, we were forced to impose restrictions on the industrial sector,” he was quoted as saying by ISNA.
Crude Steel Production Capacity Tops 40m tons
The installed capacity of crude steel production in Iran has exceeded 40 million tons per year, according to Deputy Industries Minister Vajiollah Jafari.
“The annual production of steel ingots has exceeded 30 million tons,” Jafari was also quoted as saying by IRNA during the 8th Steelprice Conference held recently.
“There are about 36 million tons of Direct Reduced Iron, 66.7 million tons of pellets and 62.7 million tons of [iron ore] concentrate installed capacity in the domestic steel industry, but at the same time we are facing problems in supplying raw materials.”
The official noted that the target capacity of 55 million tons of steel ingots’ goal is expected to be achieved in the fiscal 2025-26, of which 40 million tons have been realized so far and another 7 million tons will be added in the current fiscal year.
He announced that $21.5 billion have been invested in the steel industry, of which $19 billion have been installed.
The required electricity for steel industry is at 8,000-9,000 megawatts, of which 6,000 megawatts are currently in use and a further 12,500 megawatts are required for development projects, stressing that gas is also required as feedstock in the steel industry.
