Economy, Business And Markets

KSC to Expand Semis Export in 2016

KSC to Expand Semis Export in 2016KSC to Expand Semis Export in 2016

Iran’s largest producer of semi-finished casting products, Khuzestan Steel Company, plans to strengthen positions in export markets this year, which may tighten competition with other suppliers to the Middle East and North Africa region.

The reason for the move is the increasing number of billet producers together with the slow pace of demand recovery in Iran.

In 2015, KSC produced 3.45 million toms of semis, which is equal to 92% of capacity. The same year the producer exported 1.07 million tons of the material, predominantly billet.

Among major outlets were Saudi Arabia, the UAE, Oman and Jordan. This year the geography of export may change, however. Sales to Saudi Arabia may drop due to political issues between the countries.

At the same time, the UAE, Oman and Jordan are expected to remain strong partners, while exports to Turkey and Egypt may demonstrate an increase as these countries start to show more interest in Iranian billet, Metal Expert, a Ukraine-based provider of news and analysis on steel products and steelmaking raw materials industries, wrote in a recent report dubbed “Iran in Focus”.   

The producer also aims to strengthen position in the segment of slabs, selling mainly to Thailand, Taiwan, Morocco and Indonesia. The expected volume of slab shipments was not stated.

“Depending on demand, we are ready to increase the share of slabs in our export structure,” a company representative told Metal Expert.

Last year, KSC exported about 30,000 tons of slabs out of the total volume of shipments abroad.

This year, the producer set an export target of 1.3 million tons of semis in total.

“We plan to strengthen our positions through competitive prices, decent quality, timely delivery and increased volumes,” KSC Deputy Managing Director for Sales and Marketing Bahman Tajallizadeh said during Metal Expert’s MENA Billet Import Conference, held in Dubai this April.

The producer is working to expand its capacities to 5 million tons per year by 2017.

KSC is about to commission 1 million tons per year DRI-module at its subsidiary Shadegan Steel Mill, with commercial production scheduled to start in August. The steelmaking unit for the production of 1 million tons per year of billets is to be commissioned in Q3 2017.

KSC may influence competition in the regional billet market both in the short- and long-term.

Some market insiders believe Iran can oust some of Chinese billet volumes due to more convenient delivery terms, especially if payment issues are resolved.

Others believe that the increase in Iranian billet shipments to MENA may not influence the volumes of other suppliers, but result in decreasing prices.