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EghtesadOnline: Major Iranian steelmakers exported 1.04 million tons of steel during the first two Iranian months (March 21-May 21) to register a year-on-year decline of 15%, latest data released by the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) show.

The steel mills shipped out 609,349 tons during the second Iranian month (April 21-May 21), which shows a 31% decrease compared with the same month of the year before.

With a total of 398,739 tons of exports over the two months and 140,278 tons in the second month under review, Khouzestan Steel Company was Iran's biggest steel exporter.

Nonetheless, the mill experienced a year-on-year decline in exports both during the two months and in the second month by 19% and 61% respectively, according to Financial Tribune.

The steelmaker, located in the southwestern Khuzestan Province, exports to over a dozen countries.

About half of KSC's exports goes to the Middle East and North Africa region. Its other major export destinations are located in the Far East and Americas.

 

 

Largest Steelmaker in Second Spot

Mobarakeh Steel Company, located in Isfahan, exported 169,514 tons of products during the two months under review to register a 30% decrease YOY.

The company is the largest steelmaker in the Middle East and North Africa region and one of the largest industrial complexes operating in Iran.

In the second month, it shipped out 113,412 tons abroad, which saw a 44% decline YOY.

Esfahan Steel Company (ESCO) exported 151,648 tons during the two months, down 22% YOY.

During the month ending May 21, ESCO exported 119,324 tons to register a year-on-year decline of 13%.

 

 

Other Producers

During the two-month period, most of the other producers registered downturns.

Hormozgan Steel Company exported 156,005 tons of slab, up by 35% YOY while South Kaveh Steel Company exported 105,000 tons of rebar, which was up by 32% YOY.

Khuzestan Steel Company also shipped out 29,974 tons of bloom, indicating a 353% growth YOY. In addition, the company exported 1,978 tons of rebar during the two months, down 90% YOY.

Iran Alloy Steel Company shipped out 19,831 tons of rebar, down 5% YOY. This is while South Kaveh Steel Company exported 13,750 tons of direct-reduced iron, indicating a 58% decline YOY.

In the second month, the highest growth was registered by Khorasan Steel Company, as it exported 29,974 tons of bloom during the month, up by 353% YOY, while the company’s rebar exports registered the highest decline by 85% during the month at 1,978.

According to World Steel Association's latest data, Iran is the 10th biggest steel producer in the world, as its crude steel out during the first four months of 2019 reached 8.38 million tons, up 6% compared with the corresponding period of 2018.

Notably, the country was the second biggest producer with a direct reduced iron output of 9.3 million tons during the four months.

Iran is aggressively pursuing the target of becoming the world’s sixth largest steel producer as per its 20-Year Vision Plan, which aims to expand its annual production capacity to 55 million tons and 20-25 million tons of exports per year by 2025. 

Iranian steel mills have so far realized about 34 million tons of the target.

 

 

Impact of US Sanctions

Iran's steel exports, among other commodities, have come under pressure due to US sanctions.

UK-based analysts in Fastmarkets say US sanctions are expected to cut Iranian steel exports, gradually leading to lower Iranian steel output.

US President Donald Trump announced his decision to pull out of the nuclear deals Iran signed with world powers, including the United States, in May.

He specifically ordered new sanctions targeting Iran's export revenues from its industrial metals sector last month.

An executive order issued by Trump covers Iran’s iron, steel, aluminum and copper sectors, the Islamic Republic’s largest non-petroleum-related sources of export revenue and 10% of its export economy, a statement from the White House said.

However, Deputy Industries Minister Jafar Sarqeini has dismissed concerns about the latest US sanctions, saying high-quality Iranian products have their own international customers.

"It is unlikely that the sanctions imposed by US President Donald Trump will significantly affect Iran’s metals industry," he was quoted as saying by Tasnim News Agency, adding that he saw no reason for concern due to the excellent quality of Iranian metals that meet international standards.

Qadir Qiafeh, a senior member of Iranian Iron Ore Producers and Exporters Association, said sanctions against Iran’s economy are actually not new, they just get tougher by the round. 

“Businesspeople have learned to create workaround to US trade sanctions. Although some of these methods have been identified and can’t be used again, Iran’s mineral products will remain available on global markets,” he added.  

Qiafeh believes the executive order issued by Trump on May 8, 2019, to impose new sanctions on Iran’s industrial metals is more of a symbolic gesture than anything else since the US had already included Iran’s steel, copper and aluminum industries in the first wave of sanctions a year ago. 

A large part of mineral and steel exports is sold to neighboring countries by small- and medium-sized enterprises to their counterparts in export destinations. 

“These SMEs usually slip under the US radar,” he said. 

Shipping problems are said to be a major issue in the way of steel exports.

Under the circumstances, Iranian steel exporters have had to cut prices significantly to attract customers and compensate for the risks involved in trade with the country.

According to Deputy Industries Minister Khodadad Gharibpour, Iranian steel industry is an export-oriented, such that the country exports more than 40% of its steel output.

 

Iran steel exports