EghtesadOnline: Iranian steel mills produced 19.74 million tons of steel during January- November 2017, up 20.6% compared with last year’s corresponding period, the latest report released by World Steel Association shows.
According to WSA, Iran’s steel output in November grew by 24.4% year-on-year to hit an estimated 1.95 million tons.
And yet again, Iran’s steel sector is on a fast track to growth, as it recorded the highest growth among all products exceeding 1 million tons per month for the 11-month period. Traditional rivals like Turkey and France were still lagging behind.
Considering all producers regardless of output, Iran is ranked eighth and 15th in terms of fastest 11-month and November YOY growth respectively, Financial Tribune reported.
Iran retained its ranking as the world’s 13th largest producer of steel for the 11-month period, following a one-rank drop in October.
The country is currently placed between Ukraine (12th) with 19.89 million tons and Mexico (14th) with 18.25 million tons.
Iran produced 18.4 million tons of direct-reduced iron during the 11 months, up 25.3% YOY, to remain the world’s largest producer of DRI. The November output was up 51.9% to 2 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 1.53 billion tons of steel during the 11 months, up 5.4% YOY.
Global steel output stood at 136.2 million tons in November, indicating a 3.7% increase YOY.
China remained the world’s largest producer in the 11-month period with 764.8 million tons of steel output. Chinese steel production hit 66.15 million tons in November, registering a 2.2% increase YOY.
This is a considerable drop compared to October’s 6.1% YOY output growth, owed mostly due to China’s aggressive environmental policies and capacity cuts. Industry observers indicate that the industrial giant’s December growth might very well hit negative territory.
Following China were Japan with 95.91 million tons, India with 92.47 million tons, the United States with 74.94 million tons, Russia with 66.45 million tons, South Korea with 64.47 million tons, Germany with 39.96 million tons, Turkey with 34.16 million tons, Brazil with 31.45 million tons, Italy with 22.25 million tons and Taiwan with 21.28 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 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.
Meanwhile, Iranian steelmakers are bracing for a year of overcapacity as the government’s newly proposed budget bill is set to slash the development budget, negatively affecting steel usage in the next fiscal year (March 2018-19) and potentially prompting higher exports by mills.
The new budget bill proposes about 600 trillion rials ($14.28 billion) for development projects next year, showing a 110-trillion-rial ($2.61 billion) decline compared to what was allocated this year.
According to Reza Shahrestani, a member of Iran Steel Producers Association, the shrinking development budget is coupled with the steel industry lagging behind in attracting foreign investments required for realizing the 55-million-ton output capacity envisioned for 2025.
“We had to absorb $20 billion of foreign investments every year to reach the 2025 target. This is while only $7-10 billion have been amassed so far,” the official was quoted as saying by Fars News Agency.
Major Iranian steelmakers exported 4.56 million tons of steel during the eight months of the current year (March 21-Nov. 21), registering a 27% growth YOY.
Semi-finished output for the period stood at 11.2 million tons and finished steel production reached 7 million tons, according to statistics by Iranian Mines and Mining Industries Development and Renovation Organization.