Iran’s main heavy plate producer, Khuzestan Oxin Steel Company, is planning to increase its exports in the current Iranian year (started March 21) to around 10% of its overall output, the company’s head of Marketing and Market Research, Mohammad Khazami, told S&P Global Platts.
Oxin’s output was around 650,000 tons in the last Iranian year; some 30,000 tons of this were exported, mainly to Germany, Italy, Belgium and the Netherlands.
“Since receiving positive feedback from our European clients, our exports are expected to reach around 75,000 tons this year,” Khazami said.
The company’s trade manager, Nasser Qasemi, said the European Commission’s recent initiative to limit Chinese steel imports could also be a boon to Oxin.
The EU set up duties of up to 35.9% on imports of hot-rolled flat steel from China back in June to counter what it says are unfair subsidies.
The European Commission conducted an investigation on behalf of the 28 EU members and found a number of Chinese companies had benefited from preferential lending from state-owned banks, grants, tax deductions and the right to use industrial land, Reuters reported.
Capitalizing on the situation, Oxin is in talks with Spanish, Italian and German companies to meet their demand for flat steel.
According to Qasemi, foregoing engagement with middlemen and directly talking to clients overseas is part of Oxin’s new trade policy.
The company’s long-term plan is to use European slab for flat production to boost efficiency.
The company has already made preparations for exporting two 15,000-ton shipments of steel to Italy and Spain.
He said Oxin offers some products not made by Iran’s other main flats producer, Mobarakeh Steel Company.
“Oxin is the only Iranian producer of heavy wide steel plate and is able to produce it in widths of 1,100-4,500 millimeters with a thickness of 8-150 mm, as used by shipbuilders, large diameter pipe makers and for special purposes in the oil and gas industries,” he said.
“Currently, some 80% of its required slab are sourced from domestic producers MSC, Khouzestan Steel Company and Hormozgan Steel Company, with a further 20% (used for API grade plate) being imported,” he said, adding that the company is planning a modern, steel plant now at the stage of obtaining environmental permits.
As a result of the largest Iranian steel producer, MSC’s policy of focusing on requirements for the country’s downstream manufacturers and slowdown in exports, Oxin could become the most important flats exporter in Iran.
“We are also able to supply the materials needed by new foreign investment projects in Iran’s oil and gas industry. Oxin’s production is based on European and American standards and the company has been audited by companies affiliated with the country’s petroleum ministry, which is in charge of development projects. Therefore, we are able to supply the heavy plate which foreign companies will need for their projects in Iran,” he added.
Qasemi was seemingly referring to a strategic contract signed between the National Iranian Oil Company and a consortium comprising Total, China’s CNPC International and Iran’s Petropars Co. last week, based on which more than $54 billion worth of natural gas and natural gas condensate will be produced.
“It is good news for Iranian producers of pipe,” Amirhossein Kaveh, secretary for Iranian syndicate of steel pipe and profile manufacturers, was earlier quoted as saying by Platts.
“The projects need a huge amount of materials, including steel pipes, and we have enough capacity to supply their requirements, which will reduce costs considerably,” he said.
Kaveh added that the syndicate had not yet negotiated with Total but that Iranian suppliers of pipes had worked successfully with the oil and gas company before sanctions were imposed.
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