Economy, Business And Markets

Sharp Decline in Iron Ore, Steel Output

Sharp Decline in Iron Ore, Steel OutputSharp Decline in Iron Ore, Steel Output

Close to 12 million tons of crude steel, 11.7 million tons of steel products, 16 million tons of pellets and 11.3 million tons of sponge iron were produced during March-December 2015.

The announcement was made by Abdolmajid Sharifi, managing director of National Iranian Steel Company, Iranian Mines and Mining Industries Development and Renovation Organization’s website reported.

“Iranian steelmakers sold close to 7.5 million tons of steel valued at $2.9 billion during the period, which indicates a sharp decrease compared with last year’s sale of 9.3 million tons worth $4.3 billion,” he added.

According to the official, over 2.6 million tons of crude steel were exported during the nine-month period. The figure is expected to reach 3 million tons by the end of the current Iranian year (March 19, 2016).

The iron ore sector is faring no better, as production is forecast to reach 37 million tons by the yearend, showing a marked fall compared to the 50 million tons produced in 2013.

Tehran Stock Exchange’s listed mining companies have also lost close to 80% of their shares’ value–around $29.7 billion–during the past two years.

Sharifi noted that the slump in domestic construction sector and dwindling demand for steel that led to a stockpile of 3 million tons of steel products, coupled with the rise in production costs and the decline in global steel prices, are the main causes of the current unfavorable situation of the steel industry.

According to the official, steel prices have currently reached the rock bottom-even lower than those of the 2009 steel crisis.

Sharifi believes that prices are going to slowly stabilize as global demand will increase in 2016 and 2017. As for the Iranian market, the demand is set to grow from 18.7 million tons per year to 21.1 million tons in 2016.

Iran is currently the 14th largest steel producer in the world. Based on the 20-Year National Vision Plan (2005-25), steel production is expected to rise to 55 million tons per year.