Iranian steelmakers registered growth in production during the first four months of the current fiscal year (March 21-July 22) compared with last year’s corresponding period.
According to the Iranian Steel Producers Association, the output of semi-finished products stood at 10.59 million tons during the period, 11% more than in the corresponding period of last year.
Production of billet and bloom stood at an aggregate 6.29 million tons, registering a 9% year-on-year rise while that of slab reached 4.3 million tons to mark a 13% YOY rise.
The output of finished steel increased by 15% to 7.43 million tons during the period.
Long steel products grabbed the highest share of finished steel production with 4.19 million tons, registering a 14% increase compared with the similar period of last year.
The production of rebar stood at 3.46 million tons (up 15% YOY), beams hit 416,000 tons (up 11% YOY) and flat steel reached 3.24 million tons (up 15% YOY).
Hot-rolled coil output had the biggest share of flat steel production with 3.12 million tons, marking a 13% YOY rise. It was followed by cold-rolled coil with 812,000 tons (unchanged) and coated coil with 532,000 tons (up 8%).
The output of direct-reduced iron stood at 12.55 million tons during the period, up 19% YOY.
The ISPA data indicate a decline in steel exports and imports during the same period.
A total of 2.21 million tons of semi-finished steel products were exported from Iran during the four months to July 22, down 13% compared with the similar period of the previous year.
Billet and bloom had the lion’s share of semis exports with an aggregate of 1.55 million tons, down 8% YOY, while slab exports hit 661,000 tons, down 21%.
Exports of finished steel products declined by 25% to 876,000 tons during the same period.
Rebar accounted for the largest share of finished steel exports with 674,000 tons (down 23%)
Beam export stood at 32,000 tons, down 32%, and that of hot-rolled coil hit 101,000 tons, registering a 25% decrease.
Cold-rolled coil with 7,000 tons registered a 250% rise year-on-year.
Exports of coated coil with 28,000 tons, witnessed a 32% fall.
Iran exported 166,000 tons of direct-reduced iron during the period, down 60%.
The import of finished steel declined by 9% YOY to 244,000 tons during the same period. It mostly included HRC with 114,000 tons (up 138%), CRC with 47,000 tons (down 61%), coated coil with 60,000 (down 20%), rebar with 12,000 tons (up 33%) and beam with 4,000 tons (unchanged).
Iran did not import any semi-finished steel products or DRI during the period.
World Steel Association’s Report
According to the World Steel Association’s latest report, Iranian steel mills produced a total of 13.6 million tons of crude steel during the first half of 2022, registering a 10.8% decline compared with the corresponding period of 2021.
Iran's June output hit 2.2 million tons, down 10.8% year-on-year, the report added.
In terms of world ranking, Iran maintained its global standing as the world’s 10th biggest crude steelmaker despite the decline in production.
China was the world’s largest producer during the six-month period with 526.9 million tons of steel output, down 6.5% YOY. It was followed by India with 63.2 million tons (up 8.8%), Japan with 46 million tons (down 4.3%), the United States with 41.1 million tons (down 2.2%), Russia with 35.4 million tons (down 7.2%), South Korea with 33.8 million tons (down 3.9%), Germany with 19.6 million tons (down 5.5%) and Turkey with 19 million tons (down 4.6%).
Iran is placed after Brazil (ninth) with 17.4 million tons (down 10.8% YOY).
The world’s 64 steelmakers produced 949.4 million tons of steel in the six months under review, down 5.5% YOY. Countries located in Asia and Oceania collectively produced 701.4 million tons of the total.
The Middle East produced 20.4 million tons of crude steel during the period, posting a decline of 5.9% compared with the same period of last year.
Crude steel is defined as steel in its first solid (or usable) form: ingots and semi-finished products (billets, blooms and slabs). This is not to be confused with liquid steel, which is steel poured.
The World Steel Association is one of the largest and most dynamic industrial associations, with members in every major steel-producing country.
Worldsteel represents steel producers, national and regional steel industry associations and steel research institutes. Members represent around 85% of global steel production.
The 64 countries included in the Worldsteel report produce 85% of global steel.
Iranian steel mills produced a total of 28.5 million tons of crude steel in 2021, registering a 1.8% decline compared with 2020.
The world’s 64 steelmakers produced 1.91 billion tons of steel last year, up 3.6% YOY. Countries located in Asia and Oceania collectively produced 1.38 billion tons of the total and the Middle East produced 41.2 million tons of crude steel, posting an increase of 1.2% compared with the same period of last year.
“The installed capacity of crude steel production in Iran has exceeded 40 million tons per year,” Deputy Industries Minister Vajiollah Jafari said last year.
“The annual production of steel ingots has exceeded 30 million tons,” the official was also quoted as saying by IRNA during the 8th Steelprice Conference held in October 2021.
“Installed capacity in the domestic steel industry is about 36 million tons of direct reduced iron, 66.7 million tons of pellets and 62.7 million tons of [iron ore] concentrate, but still we are facing problems in supplying raw materials,” he added.
Jafari noted that the target capacity of 55 million tons of steel ingots is expected to be achieved by the fiscal 2025-26.
MSC is the biggest steelmaker in Iran and the Middle East and North Africa region, accounting for about half of the country's steel production.
ISPA Warns Against Power Outage
Rasoul Khalifeh-Soltani, the head of Iran Steel Producers Association, had called for a change regarding electricity supply restrictions imposed on steel plants in a letter to the Ministry of Industries, Mining and Trade.
“In the fiscal 2021-22, the Iranian steel industry fell short of its target output by 6 million tons, inflicting a loss of $4 billion. Restrictions levied on energy supply and power outages were the main reasons behind that loss,” he said.
In the summer of last fiscal year (June 22-Sept. 22, 2021), 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 put steel mills’ losses caused by power outages at $6 billion from the beginning of last Iranian year (March 21) to Sept. 12.
According to ISPA, 82 days of productions 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 led to a severe power and water shortage in summer in most regions, resulting in 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 faced restrictions of the Iran Power Generation, Distribution and Transmission Company and were only allowed to work at a fraction of their demand during specific period.
In winter, the Oil Ministry and National Iranian Gas Company put pressure on steelmakers and mining firms last year to drastically cut their gas consumption in winter.
Specifically, Chadormalu Mining and Industrial Company was asked to keep its gas consumption below 30,000 cubic meters per day. Since the quota was less than 1% of the heavyweight mining firm’s gas consumption under normal conditions, the restriction practically meant cessation of production in Chadormalu, inflicting huge losses in lost production.
Certain companies were restricted for longer periods, while others were less affected.
Producers of direct-reduced iron were the prime target of restrictions due to their energy-intensive nature. Since DRI is considered a strategic and key product in the steel industry, the measure impacted the entire steel production chain and led to a decline in steel output and rising prices.
With the decline in temperature across Iran, gas consumption in households set a record high last winter.
“Policymakers were expected to adopt measures to avoid the repeat of last year’s blackouts, but the directives issued by electricity authority imply otherwise. Almost all steel mills, especially those run by the private sector, will be closed for three months,” Khalifeh-Soltani was quoted as saying by Mehr News Agency.
“The decline in steel production would lead to an increase in the products manufactured by downstream industries such as home appliances, pipes and profiles, construction and even automobiles,” he warned.
Bahram Sobhani, the head of the board at Iran’s Steel Producers Association, had earlier voiced his concerns in a letter to Minister of Industries, Mining and Trade Reza Fatemi-Amin.
“Iran’s steel industries have made the country the world’s 10th biggest producer, despite all the restrictions and sanctions. Last year, the industry suffered losses due to gas and electricity shortage but did not, for once, think twice about cooperating with the government. Now that we have the opportunity to compensate part of these losses, we do not expect the government to step in the way and use the situation to its own benefit,” he said.
