Economy, Business And Markets

9-Month Steel Output at 12.6m Tons

9-Month Steel Output at 12.6m Tons9-Month Steel Output at 12.6m Tons

Iranian steelmakers produced more than 12.6 million tons of crude steel from March to December 2015, which indicates a 0.7% rise compared with last year’s similar period, according to Iranian Mines and Mining Industries Development and Renovation Organization.

Mobarakeh Steel Company accounted for 3.8 million tons of the total; Khuzestan Steel for 2.5 million; Esfahan Steel Company 1.7 million; Hormozgan Steel Company 894,000; Saba Steel Company 520,000; Khorasan Steel Company 498,000; Iran Alloy Steel Company 228,000; and Iran National Steel Industrial Group 137,000.

Over 11.1 million tons of steel products, such as I-beams, wide sheets, rebars, hot-rolled sheets and pipes were produced during the same period, which shows a 17% drop compared with the previous year’s corresponding period.

Meanwhile, China, the world’s largest steel producer, has announced plans to curb the industry’s overcapacity and output as part of efforts to move the heavy industry-based country towards a consumer-based economy.

China is targeting further cuts in crude steel production capacity by as much as 150 million tons, Bloomberg reported, which is good news for the global steel market, especially that of Iran.

Iran has been hurt by the industrial behemoth’s dumping strategies aimed at taking care of the country’s excess production.

The country has lowered steel production by about 90 million tons “in recent years” and will push to slash a further 100 million to 150 million tons, while “strictly controlling” steel capacity increases, according to a Sunday statement on the Chinese government’s website, citing a State Council meeting on January 22 chaired by Premier Li Keqiang.

“The Chinese government plans to set up a fund to help coal miners and steelmakers reduce their workforce and dispose of bad assets,” Li said during a meeting in Shanxi province, according to a January 7 China Central Television report.

“The financial help is dependent on the companies cutting capacity,” he said.

“Credit risks are getting higher for the steel sector because cutting excess capacity means bankruptcies for some companies,” said Yang at Nanjing Securities to Bloomberg.

“Investors should only invest in the leaders in the overcapacity industry.”

This is while defaults are already spreading in the steel sector. For instance, Sinosteel Company, a Chinese state-owned steel trader, postponed a note payment for the fourth time on December 30.