Iran's apparent steel usage registered growth in the first two months of the current fiscal year (March 21-May 21) compared with last year's corresponding period.
Latest data released by the Iranian Steel Producers Association show apparent usage totaled 3.58 million tons for finished products, posting a 12% year-on-year increase.
Apparent steel usage is defined as production plus imports minus exports, sometimes also adjusted for changes in inventories.
Flat steel products accounted for the largest portion of finished steel consumption with 1.84 million tons of finished steel apparent usage, up 10% YOY.
Among flat steel products, hot-rolled coil had the biggest share of apparent usage with 1.74 million tons (up 8% YOY), followed by cold-rolled coil with 426,000 tons (down 12% YOY) and coated coil with 271,000 tons (up 7% compared with the same period of last year).
The figure for long steel products stood at 1.74 million tons, up 15% YOY.
Rebar grabbed the biggest share in this section with 1.39 million tons, up 15% YOY, followed by beams with 202,000 tons (up 12% YOY) and L-beam, T-beam and other types with 144,000 tons (up 23% compared with the same period of last fiscal year).
The apparent usage stood at 4.82 million tons for semi-finished products, registering a 4% rise compared with last year's corresponding period.
The use of slab increased by 15% to 2.24 million tons during the period. The apparent usage of billet and bloom stood at 2.58 million tons, down 4% compared with the same period of last year.
13% Rise in DRI Usage
Direct-reduced iron usage stood at 6.54 million tons during the period under review, up 13% YOY.
DRI, also known as sponge iron, is produced from the 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.
Crude steel is dominantly produced using two methods: making cast iron in blast furnaces or using DRI and scrap in electric arc furnaces.
More than 70% of the world’s steel are made using blast furnaces, while Iranian steelmaking is mostly dominated by EAFs.
Notably, Iran launched the first indigenous DRI plant in China last year.
MME (Mines and Metals Engineering GmbH), an Iranian engineering company registered in Germany has designed, implemented and set up the first DRI production plant in the world's largest steel producer using the "Persian Reduction" method or PERED.
China, which ranks first in the world in steel production, mainly produces the energy-intensive DRI by blast furnace method, but now with the aim of overcoming environmental challenges and using Iranian technical and engineering power, the country has turned to PERED.
In PERED, the reduction process is known to be more efficient, employs improved cooling methods and cuts on pollutant gas emissions. With less heat, more homogeneous reducing gas, more controllable pellet feed and use of centrifugal compressors, PERED requires less water, electricity and gas to operate, alongside less operational and maintenance costs. PERED technology, which makes optimum use of energy and raw materials, reduces production costs with the added advantage of being more environment-friendly compared to other direct reduction methods.
Speaking to Financial Tribune in an exclusive interview in 2018, the engineering manager of MME, Hossein Aziztaemeh, explained that the contract with CSTM to import the Iranian technology was signed on May 13, 2013. However, the implementation of the project was delayed over the years due to several reasons.
"The Chinese did not find production of direct-reduced iron economically viable, but things changed after the Chinese government imposed heavy taxes on ‘unclean’ industries," he said.
Therefore, they decided to move toward cleaner industries, as they seemed more viable.
The project was launched on June 21, 2021, in Taiyuan, the capital and largest city of Shanxi Province of China with a capacity of producing 300,000 tons of HBI per year.
The furnace in this plant has been directly designed by MME and part of its main equipment is made in Iran and exported to China. Currently, due to the lack of access to natural gas, this factory uses gas from the coking oven.
MME has several main responsibilities in the project: offering engineering services, selling equipment (completely manufactured in Iran), undertaking supervision and imparting training, according to Aziztaemeh.
The replacement of MIDREX and Energiron with PERED will cut the production costs by cutting on the required initial investment and operational costs. Moreover, it is more eco-friendly.
According to the official, a majority of DRI plants in Iran have been utilizing the MIDREX reduction technology in recent years. But now, with the adoption of a new, indigenous DRI production process, the country’s steelmakers can count on increasing competitiveness.
PERED has so far been used in Iran’s steel projects of Shadegan in Khuzestan Province, Miyaneh in East Azarbaijan Province and Neyriz Steel Company in Fars Province.
Shadegan Steel Company started the hot commissioning of its DRI module in May 2017 as the first plant to utilize PERED.
Miyaneh Steel Complex’s DRI plant was the second producer to utilize PERED, which came on stream on Oct. 15, 2017. The plant has an annual sponge iron production capacity of 800,000 tons with content reaching 95%, according to Iranian Mines and Mining Industries Development and Renovation Organization.
The DRI plant of Neyriz Ghadir Steel Company's construction started in 2010. Ghadir Investment Company is the project’s main investor and owns a 65% stake in the Neyriz plant, with IMIDRO controlling the rest. Neyriz’s DRI plant is capable of producing 800,000 tons of sponge iron per year.
Aziztaemeh noted that companies from Oman and India have expressed interest in importing the Iranian technology.
Iran is the world’s second biggest producer of direct-reduced iron after India.
Growth in Output
According to ISPA, the output of semi-finished products stood at 5.89 million tons in the first two months of the current fiscal year (March 21-May 21), 5% higher compared with the corresponding period of last year.
Billet and bloom made up 3.41 million tons of total semis production, registering a 2% year-on-year growth.
Slab output stood at 2.47 million tons to register a 9% YOY rise.
The output of finished steel increased by 6% to 3.8 million tons.
Long steel products had a share of 2.03 million tons in the output of finished steel products, posting a 4% increase compared with the similar period of last year.
Rebar production stood at 1.66 million tons (up 4% YOY) and was followed by beams with 212,000 tons (up 3% YOY) and L-beam, T-beam and other types with 157,000 tons (up 3% YOY).
Production of flat steel with 1.77 million tons registered an 8% YOY increase.
Hot-rolled coil output stood at 1.7 million tons, marking a 6% YOY growth, followed by cold-rolled coil with 413,000 tons, down 6% YOY, and coated coil with 258,000 tons, down 3%, compared with last year’s corresponding period.
The output of direct-reduced iron stood at 6.54 million tons during the period under review, up 11% YOY.
Export of Semis Rises, That of Finished Products Falls
A total of 1.07 million tons of semi-finished steel products were exported from Iran in the two-month period, up 10% compared with the previous year.
Billet and bloom had the lion’s share of semis exports with an aggregate of 838,000 tons, up 29% compared with the previous year’s corresponding period.
Slab exports amounted to 228,000 tons during the period, down 28% year-on-year.
Exports of finished steel products declined by 25% to 357,000 tons during the period.
Rebar accounted for the largest portion of finished steel products exported from Iran during the period, with 272,000 tons. The total volume of Iran’s rebar exports experienced a 27% decline compared with the same period of last year.
Beam exports amounted to 12,000 tons during the period under review, down 52% YOY.
About 17,000 tons of L-beam, T-beam and other types were also exported from Iran during the period, down 56% YOY.
Hot-rolled coil exports amounted to 33,000 tons, registering a 6% growth compared with the year before.
Cold-rolled coil with 6,000 tons registered a 500% growth year-on-year and coated coil with 17,000 tons, up 89% YOY, was the other finished steel product exported from Iran.
Iran did not have direct-reduced iron exports.
20% Growth in Import of Finished Products
The import of finished steel increased by 20% YOY to 138,000 tons during the same period. It mostly included HRC with 69,000 tons, up 123%; CRC with 19,000 tons, down 55% compared with the year before; coated coil with 30,000, down 9%; L-beam, T-beam and other types with 4,000 tons, up 33% YOY; rebar with 6,000 tons, up 20% year-on-year and beam with 2,000 tons, unchanged year-on-year.
Iran did not import any semi-finished steel products and DRI during the period.
