Mobarakeh Steel Co. Sales Value Up 43%

Iran’s largest flat steel producer Mobarakeh Steel Company ended the first half of the current year (March 21-Sept. 22) with notable growth in sales value and modest upticks in production and sales volume.

MSC sold 66.9 trillion rials ($1.71 billion) worth of hot- and cold-rolled steel as well as coated materials during the six-month period, up 42.8% year-on-year, according to the latest data released by the company on Codal.ir.

The company has so far achieved 55% of its sales target for the year, thanks to rising global steel prices in the face of relatively unchanged production costs at home.

The Isfahan-based steel mill, which is also Iran’s largest producer in terms of capacity, manufactured a total of 3.25 million tons of steel products in H1 to post a 9.42% YOY growth.

The company's sales for the period recorded a meager 1.45% YOY uptick to reach 3.21 million tons.

Mobarakeh’s HRC topped the charts in H1 production to reach 1.93 million tons, 1.82 million tons of which were sold for 36 trillion rials ($930.4 million). However, all indicators were down YOY by 3.54%, 16.2% and 16.13% respectively.

What drove the company’s sales were mostly its CRC and “other” materials. CRC sales stood at 742,000 tons worth 18.6 trillion rials ($478.8 million), up 12.59% and 66.92% YOY. Production grew 25.2% to 750,000 tons.

The “Other” category, which includes niche flat products, recorded a whopping 322.3% YOY rise in sales value to 7.34 trillion rials ($188.2 million). Its output and sales jumped 87.44% and 173.8% to 418,000 and 493,000 tons respectively.

MSC’s performance for the sixth month of the year (Aug. 23-Sept. 22) included producing 552,000 tons of goods and selling 499,000 tons worth 10.72 trillion rials ($275 million). HRC took the lead by producing 349,000 tons and selling 6.3 trillion rials ($161.6 million).

Mahmoud Akbari, MSC’s head of marketing and sales, said the company has set the target to sell 7 million tons of flat steel this year (March 21, 2017-18).

Together with its subsidiaries, MSC is the largest flat steel producer in the Middle East and North Africa region and Iran’s largest steelmaker, supplying 20% of the region’s steel demand and accounting for 1% of Iran’s GDP.

The latest statistics indicate that MSC was Iran’s fourth largest steel exporter as it shipped 365,099 tons of hot- and cold-rolled, acid-washed, tin-plated, coated, checkered and galvanized flat steel during the five months of the current Iranian year (March 21-Aug. 22), down 63% YOY.

MSC, with the ticker symbol “FOLD”, is listed on Tehran Stock Exchange with a market cap of 147 trillion rials ($3.77 billion) as of September 26. Its EPS stands at 302 rials per share and realized 277 and 150 rials per share for the last two years. The P/E ratio stood at 6.49 on Tuesday.

> EU Proposes Duty on HRC Imports

The European Commission has proposed slapping a fixed price per ton duty on imports of HRC from four countries involved in a trade defense case, including Iran, and specifically Mobarakeh Steel Company.

The new measure would be used as definitive trade defense method against HRC imports from Iran, Russia, Ukraine and Brazil, according to a preliminary document seen by Metal Bulletin.

This could prove to be a potentially problematic development for MSC’s already feeble exports, making the company’s shipments even more wary of approaching the continent. However, as growing production and sales statistics in the face of dwindling exports show, MSC has shifted its focus entirely to supplying the local market.

The fixed price duty mechanism is supposed to replace EC’s previous minimum import price measure proposed in early September and rejected by the EU Trade Defense Instruments Committee.

As a result, the EC had to review the measures originally proposed and it has now suggested the use of a fixed amount per ton.

“This amendment commanded the widest possible support within the appeal committee,” the EC said in a draft document sent to interested parties on Sept. 22.

“The commission considered that company-specific fixed duties per ton take better into consideration the needs of users in the specific situation of the present case [compared with] ad valorem duties,” the EC said.

“[This is] because [fixed duties] ensure that, even when world market prices increase significantly after the investigation period, they would not burden [end-users] disproportionately.”

The definitive anti-dumping duty for Iran’s Mobarakeh Steel Company was calculated to be at €58 per ton.

The rates for Brazilian suppliers were set at €54.50 ($64.94) per ton for ArcelorMittal Brasil, €53.50 per ton for Aperam Inox América do Sul, €53.40 per ton for Companhia Siderurgica Nacional, €63.00 per ton for Usiminas, and €55.80 per ton for Gerdau Açominas.

Russian steelmakers were hit with €58 per ton for Magnitogorsk Iron & Steel Works, €53.30 per ton for Novolipetsk Steel and €17.60 per ton for Severstal.

Parties involved in the case must submit any comments on the proposal by Sept. 26, 2017. The EC is scheduled to announce its definitive decision on the case by Oct. 6 this year.

The EU Trade Defense Instruments Committee is expected to make a decision on the new proposal on Sept. 29, according to a trade lawyer.