Iranian steelmakers have registered higher exports although their production levels had decreased, latest data released by the Iranian Steel Producers Association show.
A total of 5.19 million tons of semi-finished steel products were exported from Iran in the first nine months of the current fiscal year (March 21-Dec. 21), up 16% compared with the previous year’s similar period.
Billet and bloom had the lion’s share of semis exports with an aggregate of 3.47 million tons, 1% higher than the previous year’s corresponding period.
Slab exports amounted to 1.72 million tons during the period, up 67% year-on-year.
Exports of finished steel products grew by 25% to 2.48 million tons during the nine months.
Rebar accounted for the largest portion of finished steel products exported from Iran during the period, with 1.77 million tons. The total volume of Iran’s rebar exports experienced a 44% growth compared with the same period of last year.
Beam exports amounted to 111,000 tons during the period under review, down 20% YOY.
About 145,000 tons of L-beam, T-beam and other types were also exported from Iran during the period, down 1% YOY.
Hot-rolled coil exports amounted to 354,000 tons, registering a 9% decline compared with the year before.
Cold-rolled coil with 15,000 tons registered a 40% decline year-on-year and coated coil with 85,000 tons, up 44% YOY, was the other finished steel product exported from Iran.
Exports of direct-reduced iron increased by 92% YOY to 869,000 tons, ISPA figures show.
DRI, also known as sponge iron, is produced from the direct reduction of iron ore in the form of lumps, pellets or fines by a reducing gas. It can be processed to create wrought iron.
Iran and India are the world’s biggest producers of DRI.
Decline in Imports
Imports of finished steel decreased by 14% YOY to 586,000 tons during the same period.
The imports mostly included HRC with 98,000 tons, down 63%; CRC with 215,000 tons, up 26%; coated coil with 168,000, down 6%; L-beam, T-beam and other types with 28,000 tons, down 22% YOY; rebar with 23,000 tons, up 5% and beam with 13,000 tons, up 63%.
Semi-finished steel imports made up 4,000 tons of the total import volume, unchanged YOY.
Iran imported 2,000 tons of billet and bloom in the period, down 33% YOY. Slab imports stood at 2,000 tons, up 100% from last year's same period.
Iran did not import DRI during the period under review.
Output Hit by Power Restrictions
The ISPA data show a marked decline in domestic steel production during the period under review.
Iranian steelmakers produced a total of 21.09 million tons of semi-finished products during the first nine months of the current fiscal year (March 21-Dec. 21), down 8% year-on-year.
According to ISPA, billet and bloom made up 12.47 million tons of total semi-finished production, down 13% YOY.
Slab output reached 8.62 million tons to register a 2% decline year-on-year.
The output of finished steel decreased by 5% YOY to 14.72 million tons.
Long steel products had an 8.43-million-ton share in the output of finished steel products, posting a 3% decline compared with the similar period of last year.
Rebar production stood at 6.91 million tons (down 3% YOY). It was followed by beams with 912,000 tons (down 6% YOY) and L-beam, T-beam and other types with 610,000 tons (down 1% YOY).
Production of flat steel with 6.29 million tons registered a 9% YOY decline.
Hot-rolled coil comprised 6.19 million tons in this category, showing a 6% YOY decline, followed by cold-rolled coil with 1.86 million tons, down 9% YOY; and coated coil with 1.11 down 7% compared with last year’s corresponding period.
The output of direct reduced iron stood at 23.8 million tons during the period under review, up 2% YOY.
The decline in steel output is due to the power outages and restrictions imposed on steelmakers in the past few months.
The Oil Ministry and National Iranian Gas Company are putting pressure on steelmakers and mining firms to drastically cut their gas consumption, according to a report by Persian daily Jahan-e Sanat.
Specifically, Chadormalu Mining and Industrial Company has been asked to keep its gas consumption below 30,000 cubic meters per day until further notice. Since the quota is less than 1% of the heavyweight mining firm’s gas consumption under normal conditions, the restriction practically means cessation of production in Chadormalu, which inflicts huge losses on lost production.
The report also noted that certain companies have been restricted for longer periods, while others will be less affected.
It noted that producers of direct-reduced iron are the prime target of new restrictions due to their energy-intensive nature, adding that since DRI is considered a strategic and key product in the steel industry, the measure will impact the entire steel production chain and lead to a massive decline in the output of steel products and a rise in prices.
With the decline in temperature across Iran, gas consumption in households hit a record high. This is not the first time that industries, especially steelmakers, are facing power restrictions. In the summer of the current fiscal year (June 22-Sept. 22), steel production declined by 40% compared with the previous quarter (March 21-June 21) due to electricity cuts amid record high domestic consumption.
In a letter to the Supreme National Security Council, ISPA put steel mills’ losses due to power outages at $6 billion in the first half of the current Iranian year (March 21-Sept. 22).
According to ISPA, 82 days of production were lost during the period due to power outages and 300,000 direct and indirect jobs were lost or restricted, the news portal of the association reported.
Summer demand led to a severe power and water shortage in summer in most regions, resulting in blackouts and dry taps.
The new record came as high temperatures nationwide drove general electricity consumption to new heights in summer, prompting authorities to prioritize domestic users over industries in supplying power.
As the manufacture of steel and cement is an energy-intensive process, their factories were restricted by the Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) and have been only allowed to work at a fraction of their capacity within specific hours of the day.
According to Tavanir Spokesperson Mostafa Rajabi-Mashhadi, summer electricity restrictions on industries were removed as of Sept. 23.
Crude Steel Production Capacity Tops 40m tons
The installed capacity of crude steel production in Iran has exceeded 40 million tons per year, according to Deputy Industries Minister Vajiollah Jafari.
“The annual production of steel ingots has exceeded 30 million tons,” Jafari was also quoted as saying by IRNA during the 8th Steelprice Conference held recently.
“There are about 36 million tons of direct reduced iron, 66.7 million tons of pellets and 62.7 million tons of [iron ore] concentrate installed capacity in the domestic steel industry, while we are facing problems in supplying raw materials.”
The official noted that the target capacity of 55 million tons of steel ingots’ goal is expected to be achieved in the fiscal 2025-26, of which 40 million tons have been realized so far and another 7 million tons will be added in the current fiscal year.
Jafari announced that $21.5 billion have been invested in the steel industry, of which $19 billion have been installed.
The electricity required by steel industry is at 8,000-9,000 megawatts, of which 6,000 megawatts are currently in use and a further 12,500 megawatts are required for development projects, stressing that gas is also required as feedstock in the steel industry.
