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EghtesadOnline: Iranian steelmakers exported 1.62 million tons of their products during the first two months of the current fiscal year (March 21-May 21), registering a 28.7% year-on-year growth, the Iranian Steel Producers Association announced.

Semi-finished steel made up 1.21 million tons of the total exports, up 12% YOY.

Billet and bloom had the lion’s share of semis exports with an aggregate of 875,000 tons to mark a 91% growth YOY. Slab followed with 339,000 tons, down 46% YOY.

Exports of finished steel products, on the other hand, surged 129% YOY to 413,000 tons, according to Financial Tribune.

Hot-rolled coil was the main exported finished product with 137,000 tons, registering an 813% jump YOY.

Following HRC were rebar with 206,000 tons, up 76% YOY; beams with 30,000 tons, down 3% YOY; “other steel products” with 27,000 tons, up 125% YOY; coated coil with 9,000 tons, up 200% YOY; and cold-rolled coil with 4,000 tons, up 100% YOY.

Exports of direct-reduced iron dropped 39% YOY to 99,000 tons.

Iran surpassed its 8-million-ton export target in the last fiscal year (ended March 20, 2018) by shipping 8.49 million tons of steel, up 53.4% YOY.

The government has targeted 9.5 million tons for this year (March 2018-19) and 14 million tons by the end of the fiscal 2020-21.

> Imports on the Decline

Following last fiscal year's market trend, nearly all imports of steel products declined during the period under review.

The ISPA report shows that semis' imports, which only consisted of billet and bloom, dropped 33% YOY to 4,000 tons. Slab imports dropped to zero during the period.

Imports of finished steel dropped 47% YOY to 187,000 tons. The imports mostly included CRC with 68,000 tons, down 27%; HRC with 50,000 tons, down 72%; coated coil with 47,000 tons, up 9%; rebar with 10,000 tons, down 44%; "other steel products' with 9,000 tons, down 25%; and beams with 3,000 tons, down 63%.

> Production Sees 13% Growth

Iranian steelmakers produced a total of 4.66 million tons of products during the two-month period to register a 13% growth compared with last year’s corresponding period.

Semi-finished steel made up 4.25 million tons of the total output, up 21% YOY.

Billet and bloom output made up 2.23 million tons of the total figure while that of slab reached 2.02 million tons, recording a 30% and 12% year-on-year rises respectively.

As for finished steel, output increased 5% YOY to reach 3.4 million tons.

Hot-rolled coil had the lion's share of finished steel production with 1.4 million tons, up 14% YOY.

It was followed by rebar with 1.12 million tons, up 5%; cold-rolled coil with 360,000 tons, down 14%; coated coil with 207,000 tons, down 24%; beams with 173,000 tons, up 94%; and "other steel products" with 132,000 tons, down 14%.

Iran’s direct-reduced iron production is registering a healthy growth. It stood at 4.25 million tons during the two-month period of the current year, indicating a 29% rise YOY.

The Iranian steel industry plans to increase its crude steelmaking capacity to 55 million tons by 2025 and become the world’s sixth largest steelmaker. 

Industries Minister Mohammad Shariatmadari said about 30 million tons of the target capacity have been realized so far.

> Semis Apparent Usage Growing

According to ISPA, Iran's apparent steel usage (defined as production plus imports minus exports, sometimes also adjusted for changes in inventories) stood at 3.04 million tons for semis to grow 25% and reached 3.18 million for finished products to drop 7% YOY.

Hot-rolled coil had the lion’s share of finished steel consumption as it reached 1.32 million tons, down 6% YOY. It was followed by rebar with 930,000 tons, down 5% YOY; cold-rolled coil with 424,000 tons, down 17% YOY; coated coil with 245,000 tons, down 21% YOY; beams with 146,000 tons, up 121%; and "other steel products" with 114,000 tons, up 26% YOY.

As for semis, usage of billet and bloom grew 8% to 1.36 million tons, while that of slab surged 42% to 1.68 million tons. 

DRI usage, too, was up 25% for the period to 3.04 million tons.

The apparent steel usage statistics indicate that the construction sector's years-long comatose state is likely coming to an end.

The United States' looming sanctions on Iran, which also include limitations on steel exports, could have far-reaching implications.

According to the US Treasury Department, sanctions on Iran's sale, supply or trade of metals such as aluminum and steel, as well as graphite, coal and certain software for "integrating industrial processes" will return on August 6, i.e. after passing a 90-day mark since US President Donald Trump's announcement on reinstating sanctions against Iran.

With limited access to export markets, local producers would be expected to double down on meeting domestic demand. However, Iranian producers have proved in the past that sanctions can be circumvented, if the need arises. Whether that is still a possibility remains to be seen.

 

Iran Steel Exports