EghtesadOnline: Iranian steel mills produced 8.159 million tons of crude steel in the five months to June 2017, registering a 13.1% growth year-on-year compared with last year’s corresponding period, according to the latest report released by World Steel Association.
This is among the world’s fastest growths. Among major steelmakers with a five-month output of over 2 million tons, Iran takes the fourth spot after Vietnam (110.9%), Poland (16.1%) and Brazil (14.2%).
The report shows Iran’s crude steel output in May stood at approximately 1.79 million tons, indicating an 8.8% rise compared to last year’s similar month and a 3.1% increase compared to April 2017.
Iran also produced 7.232 million tons of direct-reduced iron during the five months, up 10.8% YOY, to remain the world’s largest producer of DRI. The May output was up 13.1% to 1.565 million tons. This was about 350,000 tons more compared to the output of Iran’s closest rival India, according to Financial Tribune.
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.
Global steelmakers produced 694.87 million tons of crude steel during the five months, up 4.7% YOY.
Global crude steel production stood at 143.32 million tons in May, indicating a 2% increase YOY. It increased by 0.89% compared to April.
WSA members represent approximately 85% of the world’s steel production, including over 160 steel producers with 9 of the 10 largest steel companies, national and regional steel industry associations and steel research institutes.
Many global steel producers continued their growing trend in May. China produced 72.25 million tons during the month, registering a 1.8% increase. The United States, Japan, Brazil, France and Iran’s regional rival, Turkey, also recorded upticks.
This is while heavyweight European producer Germany posted a meager 0.1% growth for the month.
According to Bloomberg, the cause can be found in steel revenues dropping as competition from China slashes prices and erodes profits. While biggest German producer Thyssenkrupp has recovered from three years of losses that ended two years ago, its materials division, including steel, made up 28% of total earnings in the last fiscal year. The European giant’s profits now mostly come from making elevators, not metal.
South Korea and Italy’s output also declined among major producers.
China remained the world’s largest producer during the first five months of 2017 with 346.83 million tons, followed by Japan with 43.93 million tons, India with 41.82 million tons, the US with 33.97 million tons, Russia with 29.83 million tons, South Korea with 28.42 million tons, Germany with 18.61 million tons, Turkey with 15.09 million tons, Brazil with 14.07 million tons, Italy with 10.26 million tons, Taiwan with 9.25 million tons and Ukraine with 8.91 million tons.
Iran remained the world’s 14th largest steelmaker during the five-month period, as it was placed between Mexico (13th) with a 8.2-million-ton output and France (15tH) with 6.59 million tons.
Iran’s crude steel output stood at 17.89 million tons in 2016, according to WSA data. The country aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan (2005-25), which envisions annual production of 55 million tons of crude steel and 20-25 million tons of exports per year by the deadline.
According to Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, Iranian steel mills have so far materialized about 60% of the capacity target.
The main challenges so far have been maintaining a steady capacity-making growth, balancing raw material supply across the spectrum and boosting the pace of production and steel usage compared to capacity-making.