Economy, Business And Markets

Iran’s Steel Output Up 21%

The world’s 66 steelmakers produced 1.41 billion tons of steel during the 10 months, up 5.6% YOY.The world’s 66 steelmakers produced 1.41 billion tons of steel during the 10 months, up 5.6% YOY.

Iranian steel mills produced 17.9 million tons of steel since the beginning of January up to the end of October, showing a rise of 20.9% compared with last year’s corresponding period, the latest report released by World Steel Association shows.

According to WSA, Iran’s steel output in October grew by 24.2% year-on-year to hit an estimated 1.98 million tons.

Iran’s steel sector is on a fast track to growth, as it recorded the highest expansion among all producers of more than 1 million tons per month for the 10-month period, beating the regional rival Turkey and also long-time European rival France.

Considering all producers regardless of output, Iran is ranked 10th and 15th in terms of fastest 10-month and October YOY growth respectively.

The slowing growth compared to September’s 30% upsurge made Iran drop one rank in global production during the 10 months under review and become the world’s 13th largest producer of steel and was placed between Ukraine (12th) with 18.04 million tons and Mexico (14th) with 16.65 million tons.

Iran produced 16.43 million tons of direct-reduced iron during the period, up 22.9% YOY, to remain the world’s largest producer of DRI. The October output was up 46% to 2.09 million tons.

DRI, also called sponge iron, is produced from the direct reduction of iron ore to iron by a reducing gas made from natural gas or coal. It is most commonly made into steel using electric arc furnaces. About 70-75% of Iranian mills use EAFs.

The world’s 66 steelmakers produced 1.41 billion tons of steel during the 10 months, up 5.6% YOY.

Global steel output stood at 145.07 million tons in October, indicating a 5.7% increase YOY.

China remained the world’s largest producer in the 10-month period with 709.5 million tons of steel output. Chinese steel production hit 72.36 million tons in October, registering a 6.1% increase YOY. The giant steelmaker has been growing in output every month, and it has now increased output over its September output.

Following China were Japan with 87.23 million tons, India with 84.12 million tons, the United States with 68.36 million tons, Russia with 60.42 million tons, South Korea with 59.14 million tons, Germany with 36.47 million tons, Turkey with 31.04 million tons, Brazil with 28.51 million tons, Italy with 20.02 million tons and Taiwan with 19.38 million tons.

Iran’s steel output stood at 17.89 million tons in 2016, according to WSA. The country aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets the annual production of 55 million tons of steel and 20-25 million tons of exports per year by 2025. Iranian steel mills have so far realized more than 60% of the capacity target.

The main challenges to the target’s realization is lack of balance in Iran’s steel production chain and underdeveloped transportation sector, workforce overabundance, declining economies of scale and the deep divide between demand and output, according to a report by Iron & Steel Society of Iran.

ISS data show there is a sizable imbalance between the nominal capacities of different links of steel production chain in Iran, and an even greater disparity in output.

The steel industry might be sprinting to the 55-million-ton target, but it will need to bring different sectors up to speed before it can materialize its goal.

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