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Iran’s strategic steel expansion plan on track as sector keeps growing

13 January 2018 14:16

Iran’s steel sector grew last year during which production grew sharply, signaling that the country’s target of raising output to 55 million tonnes per year is on track.

Officials put current production at 16 million tonnes which accounts for 1 percent of the world total even though there is a capacity to produce 32.5 million tones a year. They foresee exports of 20-25 million tonnes by 2025 under the country’s strategic steel expansion blueprint.

According to Iranian state mines and metals holding company IMIDRO, local steelmakers produced 27.9 million tonnes of iron ore concentrate in the first nine months of the current Iranian fiscal year which ends on March 21, up 17% year on year.

Iron ore pellet represented the biggest jump as the country opened several pelletizing projects, it said.

During the period, around 23.62 million tonnes of iron ore pellet was produced, up 26% on the year. In addition, 14.32 million tonnes of direct reduced iron was produced, reflecting a 15% on-the-year increase.

The IMIDRO report, cited by Platts, also put crude steel output at 12.77 million tonnes, up 19% from the same period in the previous year.

Chairman of the Iranian Steel Producers’ Association Mahmoud Eslamian said crude steel production is set to rise above 30 million tonnes in the next year from 21.5 million tonnes this year.

First rebar exports to Europe

On Tuesday, Platts quoted an official at Esfahan Steel Co (ESCO) as saying that the mill had exported its first rebar cargo to the UK.

The deal for 5,000 tonnes was concluded in October, the official said, adding the cargo is due in late January 2018 and is now ready to be shipped.

Iran’s first rebar cargo to the UK is due in late January 2018.
Additional contracts are nearly finalized for the same destination, while another cargo is under negotiation for Scotland, he added.

Iran’s steel exports, however, face an increasingly hostile terrain in Europe where the bloc’s executive body, the European Commission, has levied trade tariffs against Iranian products.

Last October, the European Union decided to hit hot-rolled steel from Iran with trade tariffs despite initial opposition to punitive measures by European governments.

EU’s increasing protectionism in the steel industry has drawn strong protests from other producers, including China which has accused the bloc of using the unfair and unreasonable surrogate country approaches.

European steel producers have been pressuring the continent’s leaders to copy draconian US regulations, including levies of more than 500 percent on steel imports in some cases.

The hot-rolled coil market in Europe is worth about 10 billion euros ($11.1 billion) which is a monopoly of companies such as ArcelorMittal and ThyssenKrupp.

Experts say EU’s protective measures highlight a drive in the bloc to keep steel industry regionalized and maintain clout on its annual sales of 166 billion euros.

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