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Production of 3 Minerals Below Nominal Capacity

The domestic steel industry is expected to use 77.2% of its 22 million-ton capacity by the end of the current Iranian year (March 20, 2017).
The domestic steel industry is expected to use 77.2% of its 22 million-ton capacity by the end of the current Iranian year (March 20, 2017).

Iran’s iron ore, copper and steel industries have been operating under their nominal production capacity for the past few years due to unstable demand in China and in the domestic market, fluctuations in global mineral prices and the persistent glut in the mineral commodities market.

The domestic steel industry, despite a rising trend in production capacity, has not been able to reach its nominal output for the past five years.

According to statistics released by the Iranian Mines and Mining Industries Development and Renovation Organization, the industry’s largest gap between production and capacity occurred during March 2011-12, as only 68% of the 20.6 million-ton crude steelmaking capacity was utilized.

The capacity utilization rate slowly went up next year to 72% and is expected to stand at 77.2% of the current 22 million-ton capacity by the end of the current Iranian year (March 20, 2017).

Iron ore had one of the sharpest freefalls in prices in 2015, as it lost more than 70% of its value over the year. However, the commodity has slowly recovered this year and follows a rising trend in both production and capacity-making.

The sector experienced its highest gap between production and nominal capacity during March 2015-16, as it utilized 81.8% of its capacity. It is expected to utilize 92.3% of its capacity by the end of the current year, as its output is expected to reach 48 million tons.

Iran has been seriously seeking to boost iron ore production and plans to reach a 55 million-ton crude steel production capacity as per the goals envisioned in the 20-Year National Vision Plan (2005-25).

Furthermore, copper production capacity has remained at 250,000 tons per year for the past decade and only experienced fluctuations in production. Copper production during March 2013-14 stood at 188,000 tons and increased to 194,000 tons over the next two years.

IMIDRO forecasts that the country’s annual copper output will reach 200,000 tons by the end of the current year.

Head of Iran’s largest copper company announced last week that Iran does not hold substantial, world-class mineral reserves and its established mines may be depleted in about 30 years.

“National Iranian Copper Industries Company’s mineral explorations account for half of all the exploration projects implemented across the country,” ISNA quoted NICICO chief, Ahmad Moradalizadeh, as saying.

Financialtribune.com