Economy, Business And Markets

Steel Sector Growth Continues Into 2015

Steel Sector Growth Continues Into 2015Steel Sector Growth Continues Into 2015

Latest statistics by the World Steel Association show that crude steel production in Iran during the first two months of 2015 recorded 15% growth compared to the similar period in 2014, reaching 2.77 million metric tons, Tasnim news agency reported on Friday.

The country produced 2.4 million tons of crude steel in January and February 2014. The production in the entire years 2013 and 2014 also witnessed growth of 6.6% and 6% respectively. The report also indicates that more than 1.4 million tons of steel were produced in February 2015 alone, registering 12% growth compared to the same month a year before, in which 1.26 million ton of steel was produced.

The production growth is remarkable in the sense that the global crude steel production during the first two months of 2015 fell close to 1% in comparison with the similar two-month period in 2014, reaching 261 million tons. What makes the achievement more remarkable is the fact that the country has been hit by western sanctions (imposed over its nuclear energy program), which prohibited the import of raw material and equipment to produce steel.

During the first 11 months of the past Iranian calendar year (March 21, 2014 - February 19, 2015), the country produced 15.5 million tons of crude steel. If the average monthly production is considered at above 1.4 million tons, the annual production in the Iranian year 1393 (ended March 20) adds up to more than 16.9 million tons, which would narrowly meet the scheduled plan envisaged by the ministry of industry, mine, and trade, targeting the production of 17 million tons of crude steel by the end of last year, IRNA reported. The 17-million-ton in the Iranian year 1393 indicates 9% growth compared to the previous year, in which the country had produced 14.3 million tons of steel.

Market experts believe crude steel production is behind schedule. Mohammad Azad, the head of the Iran iron sellers’ guild, says the country was supposed to produce 20 million tons of crude in the Iranian year 1393, while the production barely exceeded 16 million tons. He added that the unprecedented recession in the housing and construction sector caused a 50% decline in the domestic consumption of steel and steel products. “Throughout the [Iranian calendar] year 1393, domestic steelmakers gradually decreased production and prices also decreased. During the last two months of the Iranian year (January 21- March 20) when consumers usually make their purchases for the new year, there was a boom in the steel and iron market”, Fooladnews cited Azad as saying.

The domestic steel market was also hit by the recession in the global markets, whereas some market analysts believe the Iranian year 1393 was the worst year ever for the domestic steel manufacturers.