In its latest report titled “Short Range Outlook for 2017-18”, the World Steel Association forecasts that Iranian steel demand will increase by 4.9% to 20.04 million tons in 2017 and will increase to 6% in 2018 to 21.25 million tons.
WSA also puts Iran’s per capita steel demand at 247.7 kilograms of finished steel per person in 2017 and 259.8 in 2018.
Iranian steel mills produced 14.46 million tons of steel and steel products during the past fiscal year (ended March 20, 2017), up 4.58% year-on-year. Major steelmakers also exported over 5.38 million tons of steel during the period, registering 29% growth YOY, according to Iranian Mines and Mining Industries Development and Renovation Organization.
The country would highly benefit from rising steel demand and consumption, as it is following an aggressive expansion plan to become the world’s sixth largest steelmaker as per the20-Year Vision Plan (2005-25). The plan envisions the production of 55 million tons of crude steel and 20-25 million tons of exports per year by the deadline. Iranian mills have so far materialized 31 million tons of the target.
Steel Demand, Economic Growth in MENA
Steel demand in Middle East and North Africa region, one of Iran’s primary export markets, is expected to grow by 2.5% in 2017 to 74.417 million tons and 3.8% in 2018 to 77.246 million tons.
In 2016, economic growth in MENA decelerated due to low oil prices and fiscal consolidation in oil exporters, with the exception of Iran and Iraq.
MENA is expected to report moderate growth in 2017-18 as an increase in oil prices is reviving activity in the Arab countries in the Persian Gulf region and some oil importers start benefiting from structural reforms.
The regional outlook is subject to risks related to oil prices and ongoing military conflicts.
In Iran, according to IMF, the strong economic growth in 2016-17 will moderate to 3.5% in 2017-18 due to stabilization of oil production and modest expansion of its non-oil sector.
Iran continues to reform its agenda, but the recent increase in tensions with the United States may complicate its implementation.
Global Outlook
WSA’s global forecasts indicate that steel demand will rise worldwide by 1.3 to 1.535 billion tons in 2017, following a growth of 1% in 2016.
In 2018, it is forecast that global demand will grow by 0.9% and reach 1.548 billion tons.
The association, representing more than 160 steel producers accounting for 85% of global production, had forecasted in October that demand would rise 0.5% this year.
The global steel industry, worth about $900 billion a year, is seen as a gauge of the world’s economic health.
Commenting on the industry’s global outlook, Thachat Viswanath Narendran, chairman of the World Steel Economics Committee, said that in 2016, steel demand recovery was stronger than expected with the upside mostly coming from China.
“We believe in 2017 and 2018, we will see a cyclical upturn in steel demand with a continuing recovery in the developed economies and an accelerating growth momentum in the emerging and developing economics. We expect that Russia and Brazil will finally move out of their recessions,” he said.
“However, China, which accounts for 45% of global steel demand, is expected to return to a more subdued growth rate after its recent short uplift. For this reason, overall growth momentum will remain modest.”
WSA’s short range outlook for April 2017 is one of a series of reports first started in 1968. It is prepared by the association’s secretariat on the basis of assessments of short-term trends in steel market obtained from publicly available sources and contributed by steel company or organization members of World Steel Association.
The draft of the outlook was discussed at the meeting of the economics committee in Ho Chi Minh City, Vietnam, on March 14-15, 2017.
Add new comment
Read our comment policy before posting your viewpoints