Iranian steel mills produced a total of 4.24 million tons of crude steel during the first two months of 2019, up 7.6% compared with the corresponding period of 2018, the latest report released by the World Steel Association shows.
Iran’s February steel output grew 21.7% year-on-year to hit 2.01 million tons, according to the Brussels-based international trade body for the iron and steel industry.
Iran's world ranking was unchanged since December, as it remained at the 10th spot in Worldsteel's latest report. The country is placed between Turkey (ninth) with 5.2 million tons and Italy (11th) with 4 million tons.
The world’s 64 steelmakers produced a total of 287.6 million tons of steel over the two months, up 3.8% YOY.
Global steel output stood at 137.27 million tons in February, indicating a 4.1% increase YOY.
China was the world’s largest crude steel producer with 149.58 million tons of steel output, up 9.2% YOY.
China was followed by India with 17.92 million tons, Japan with 15.88 million tons, the United States with 14.41 million tons, South Korea with 11.84 million tons, Russia with 11.02 million tons, Germany with 6.57 million tons and Brazil with 5.2 million tons.
Iran’s crude steel output stood at 24.52 million tons in 2018, according to Worldsteel, up 17.7% YOY.
Crude steel is defined as steel in its first solid (or usable) form: ingots, semi-finished products (billets, blooms and slabs). This is not to be confused with liquid steel, which is steel poured.
The report shows global direct-reduced iron output increased 4.5% year-on-year to 14.26 million tons during the two months to Feb. 28.
Global DRI output in February stood at 6.81 million tons to register a 4% growth YOY. Production for 2018 grew 11.6% YOY to 84.3 million tons.
Iran was the second biggest producer with 4.81 million tons of DRI production during the period to register a 30% YOY growth.
Iran’s February DRI output grew 24.1% YOY to hit 2.28 million tons. It produced a total of 25.54 million tons of DRI in 2018, up 31.6% YOY.
India, Iran's primary rival in DRI output, decreased its two-month production by 6.7% YOY to 5.07 million tons.
The largest decrease was in Argentina, where output decreased 62% YOY to 110,000 tons.
Iran aims to become the world’s sixth largest steel producer as per its 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 just over 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.
An Export-Oriented Industry
According to Deputy Minister of Industries, Mining and Trade and Chairman of Board of Iranian Mines & Mining Industries Development & Renovation Khodadad Gharibpour, Iranian steel industry is an export-oriented one in that the country exports more than 40% of its steel production.
"I think that’s the key issue for every Iranian steel producer because export is one of the most important ratios in their production because on the one hand, domestic consumption is not growing fast enough to feed all the nominal capacities coming up and on the other side you have not only sanctions from the US, you also have anti-dumping," Joachim Schroder, chairman of RCG Research & Consulting Group AG, told Financial Tribune in an interview on the sidelines of the opening of the ninth edition of the "Iranian Steel Market Conference", also known as ISMC 2019.
The European Union announced definitive anti-dumping duties on the import of hot-rolled coils 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 do not have sufficient domestic production so there are some selective markets still open. 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," Schroder added.
The two-day ISMC 2019 was concluded on January 30. It 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, is organized to discuss challenges and opportunities facing Iran's steel industry. This year, perhaps, the challenging part has grabbed more attention amid the new round of US sanctions imposed against the Islamic Republic with the aim of restricting Iran's trade with the world.
