Iran's apparent steel usage registered decline in the current Iranian year’s first nine months (March. 21-Dec. 21) compared with last year's corresponding period.
Apparent steel usage is defined as production plus imports minus exports, sometimes also adjusted for changes in inventories.
The apparent usage totaled 12.83 million tons for finished products, posting a 10% year-on-year decrease, according to the Iranian Steel Producers Association.
Long steel products accounted for the largest portion of finished steel consumption with 6.47 million tons, down 11% YOY.
Rebar grabbed the biggest share in this section with 5.16 million tons, down 13% YOY, followed by beams with 814,000 tons (down 3% YOY) and L-beam, T-beam and other types with 493,000 tons (down 2% compared with the same period of last fiscal year).
Flat steel products accounted for 6.26 million tons of finished steel apparent usage, down 7% YOY.
Among flat steel products, hot-rolled coil had the biggest share of apparent usage with 5.93 million tons (down 8% YOY), followed by cold-rolled coil with 2.06 million tons (down 6% YOY) and coated coil with 1.05 million tons (down 6% compared with the same period of last year).
The apparent usage stood at 15.91 million tons for semi-finished products, registering a 14% decline compared with last year's corresponding period.
The apparent usage of billet and bloom amounted to 9 million tons, down 17% compared with the same period of last year. The use of slab also decreased by 11% to 6.91 million tons during the period.
DRI usage stood at 22.93 million tons during the period under review, unchanged YOY.
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 21.09 million tons of semi-finished products from March 21 to Dec. 21, down 8% year-on-year.
According to ISPA, billet and bloom made up 12.47 million tons of total semi-finished production, down 13% YOY.
Slab output reached 8.62 million tons to register a 2% decline year-on-year.
The output of finished steel decreased by 5% YOY to 14.72 million tons. Long steel products had an 8.43 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 6.91 million tons (down 3% YOY). It was followed by beams with 912,000 tons (down 6% YOY) and L-beam, T-beam and other types with 610,000 tons (down 1% YOY).
Production of flat steel with 6.29 million tons registered a 9% YOY decline.
Hot-rolled coil comprised 6.19 million tons in this category, showing a 6% YOY decline, followed by cold-rolled coil with 1.86 million tons, down 9% YOY, and coated coil with 1.11 down 7% compared with last year’s corresponding period.
The output of direct reduced iron stood at 23.8 million tons during the period under review, up 2% YOY.
The decline in steel output is due to power outages and operational restrictions imposed on steelmakers in the past few months.
The Oil Ministry and National Iranian Gas Company are putting pressure on steelmakers and mining firms to drastically cut their gas consumptions, according to a report by Persian daily Jahan-e Sanat.
Specifically, Chadormalu Mining and Industrial Company has been asked to keep its gas consumption to below 30,000 cubic meters per day until further notice. Since the quota is less than 1% of the heavyweight mining firm’s gas consumption under normal conditions, the restriction practically means cessation of production in Chadormalu, which inflicts huge losses in lost production.
The report also noted that certain companies have been restricted for longer periods, while others were less affected.
The report noted that producers of direct-reduced iron (DRI) are the prime target of new restrictions due to their energy-intensive nature, adding that since it’s a strategic and key product in the steel industry, the measure will impact the entire steel production chain and lead to massive decline in output of steel products and increase prices.
With the decline in temperature across Iran, gas consumption in households has set a record high.
This is not the first time industries, especially steelmakers, are facing power restrictions. In the summer of the current fiscal year (July 23-Sept. 22), steel production declined by 40% compared with the previous quarter (March 21-June 22) due to electricity cuts amid record high domestic consumption.
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. 12.
According to ISPA, 82 complete days of productions were lost during the period due to power outages and 300,000 direct and indirect employment were lost or restricted, the news portal of the association reported.
Summer demand led to severe power and water shortage in most regions, giving rise to blackouts and dry taps.
The record came as high temperatures nationwide drove general electricity consumption to new heights in summer, prompting authorities to prioritize domestic users over industries in supplying power.
As the manufacture of steel and cement is an energy-intensive process, their factories were 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.
According to Tavanir Spokesman Rajabi Mashhadi, summer electricity restrictions for industries were removed as of Sept. 23.
Decline in Imports
Imports of finished steel decreased by 14% YOY to 586,000 tons during the same period.
The imports mostly included HRC with 98,000 tons, down 63%; CRC with 215,000 tons, up 26%; coated coil with 168,000, down 6%; L-beam, T-beam and other types with 28,000 tons, down 22% YOY; rebar with 23,000 tons, up 5% and beam with 13,000 tons, up 63%.
Semi-finished steel imports made up 4,000 tons of the total import volume, unchanged YOY.
Iran imported 2,000 tons of billet and bloom in the period, down 33% 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.
Strong Rise in Exports
A total of 5.19 million tons of semi-finished steel products were exported from Iran during the period, up 16% compared with the previous year’s similar period.
Billet and bloom had the lion’s share of semis exports with an aggregate of 3.47 million tons, 1% higher than the previous year’s corresponding period.
Slab exports amounted to 1.72 million tons during the period, up 67% year-on-year.
Exports of finished steel products grew by 25% to 2.48 million tons during the nine months.
Rebar accounted for the largest portion of finished steel products exported from Iran during the period, with 1.77 million tons. The total volume of Iran’s rebar exports experienced a 44% growth compared with the same period of last year.
Beam exports amounted to 111,000 tons during the period under review, down 20% YOY.
About 145,000 tons of L-beam, T-beam and other types were also exported from Iran during the period, down 1% YOY.
Hot-rolled coil exports amounted to 354,000 tons, registering a 9% decline compared with the year before.
Cold-rolled coil with 15,000 tons registered a 40% decline year-on-year and coated coil with 85,000 tons, up 44% YOY, was the other finished steel product exported from Iran.
Exports of direct-reduced iron increased by 92% YOY to 869,000 tons, ISPA figures show.
