Economy, Business And Markets

KSC is Iran’s Biggest Steel Exporter

KSC has regular exports to 13 countries now, some 50% of which are shipped to the Middle East and North Africa region, 40% to the Far East and about 10% to American countries
KSC Becomes Iran’s Biggest Steel ExporterKSC Becomes Iran’s Biggest Steel Exporter
Some 52% of KSC’s output were exported amid the slump in domestic construction

Khouzestan Steel Company became Iran's largest exporter of steel by exporting 1.9 million tons of billet and slab in the Iranian year that ended March 20, 2017, according to KSC sales deputy, Bahman Tajallizadeh.

"Some 52% of the company's output was exported, a historical record for Iran's steel industry. Mobarakeh Steel Company, Iran's largest producer, was previously the country's largest exporter of steel," Tajallizadeh was quoted as saying by S&P Global Platts.

"We have regular exports to 13 countries now, some 50% of which are shipped to the Middle East and North Africa region, 40% to the Far East and about 10% to American countries."

Asia is an important market for KSC, which has developed its export markets in Thailand, Taiwan, South Korea, Malaysia and Indonesia, as Chinese exports to these countries decreased last year.

"Some 800,000 tons of our products, including billet and slab, were shipped to these countries. We will also focus on the American market such as Brazil and Canada in the current year," he said.

"Our export price is, on average, 15% higher than domestic market levels. At present, we export billet for approximately $390 per ton."

As per the company's strategic plan, KSC produced 3.6 million tons of semi-finished products last year and plans to increase its annual capacity to 5 million tons within two years and ramp it up to 13.6 million tons by 2025.

According to an Iranian steel specialist, the metal was Iran's largest export commodity after oil, gas and petrochemicals, partly because of the slump in domestic construction.

Exports were likely to rise in future as a result of broad government investment to increase Iran's steelmaking capacity to 55 million tons a year and also because production costs at a majority of Iranian steelworks are internationally competitive as a result of low energy prices in the country.

According to Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, Iranian mills have so far materialized 31 million tons of the annual steel manufacture capacity target.

Iran Steel Producers Association's latest data show Iranian steelmakers exported about 4.87 million tons of crude steel and steel products during the 11 months to February 18.

About 3.22 million tons of crude steel were exported during the period, registering a 108% rise year-on-year. The export of steel products, however, dropped 16% to reach 1.64 million tons.

Semi-finished casting products, including billets, blooms and slabs, had the lion’s share of exports in the steel sector. Over 1.89 million tons of blooms and billets were shipped during the period, marking a 29% growth YOY. Slab exports surged by a staggering 1,416% to 1.33 million tons.

Hot-rolled coils were the next in line. Over 1.02 million tons of HRC were exported, indicating a 27% drop. Rebar exports followed with 234,000 tons, beams with 178,000 tons, cold-rolled coils with 147,000 tons, coated coils with 26,000 tons and other steel products with 37,000 tons.

With the exception of HRC and rebar, all other products recorded a solid growth in shipments—CRC exports nearly doubled.

Iranian steelmakers produced 16.83 million tons of crude steel and 16.58 million tons of steel products during the 11-month period, registering a 10% and 3% growth respectively.

Some 2.61 million tons of steel products were imported during the same period, which shows a 30% fall YOY. Imports declined for all products compared to last year, with HRC and CRC making up the bulk of purchases with 1.49 million tons and 556,000 tons respectively. Crude steel imports stood at 187,000 tons, up 82% YOY.

Domestic steel consumption growth was again in the negative territory. Local buyers consumed 13.79 million tons of crude steel and 17.55 million tons of steel products in the 11-month period, indicating a 1% and 2% decline respectively.


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