Iran Lowers Flat Steel Import Tariffs

EghtesadOnline: The government has finally dialed down import duties on various types of flat steel, despite objections by producers and even government bodies such as Iranian Mines and Mining Industries Development and Renovation Organization.

News ID: ۷۴۵۱۱۸

07 April 2018

According to reports by Chilan Online, tariffs on hot-rolled coil with a thickness of up to 4.75 mm and HRC wider than 1,850 mm have fallen by 5% to reach 10%. This is while duties on API flat products used in oil, gas and petrochemical industries have reduced from 15% to reach 10%.

Import duties for cold-rolled coil with 0.5-1 mm thickness have reached 10% from the previous 20%.

Duties on tin-plated flats less than 0.5 mm have shed 11% to stand at 15%, Financial Tribune reported.

Tariffs on aluminum and zinc-plated flats have also dropped 6% to reach 20%.

Annealed and phosphated cold-drawn steel wires used in the production of bolts and nuts dropped 11% in import duties to 15%.

All the figures are a sum of product-specific import duties and a 5% flat import tax levied on all goods imported into the country.

The final ratification of the reduced import tariffs shows that downstream flat steel users who accused suppliers of deliberately limiting supply and jacking up prices, have won the months-long battle over heavyweight producers such as Mobarakeh Steel Company.

The government had promised to cut down flat steel import tariffs since February 2017.

The main winner will be Iran's Syndicate of Steel Pipe and profile Manufacturers, which has championed private steel users' cause for years now.

Yet the new duties' critics, such as Iran Steel Producers Association, maintain that lower import tariffs are unlikely to have the effect desired by the government and users: that is, lower flat steel prices in the local market.

"Our local prices are already lower than global ones and production capacities are left unused in mills. As it is, reduced duties will not affect domestic prices," said Rasool Khalifeh-Soltan, the head of ISPA.

Deputy industries minister and head of IMIDRO, Mehdi Karbasian, expressed concerns regarding lower tariffs on March 14 and called on Industries Minister Mohammad Shariatmadari to reconsider the measure by setting up a "special council" for further deliberation.

Latest statistics by Iran Steel Producers Association show that imports of most steel products declined during the first 11 months of the previous fiscal year (March 21-Feb. 19). Semis imports shrank 75% year-on-year to 47,000 tons. Billet and bloom imports dropped 86% YOY to 25,000 tons. Slab imports, however, surged 633% YOY to 22,000 tons.

Imports of finished steel dropped 21% YOY to 2.07 million tons. The imports mostly included less than 3-mm thick HRC with 665,000 tons, down 44% YOY, followed by cold-rolled coil with 643,000 tons, up 16% YOY; coated coil with 370,000 tons, up 21% YOY; thicker than 3-mm HRC with 209,000 tons, down 33% YOY; “other steel products” with 76,000 tons, down 28% YOY; rebar with 73,000 tons, down 51% YOY; and beam with 34,000 tons, down 11% YOY.

Exports registered a healthy growth of 52.2% to 7.41 million tons during the same period. Semi-finished steel made up 6.04 million tons of the total exports, up 87% YOY. Finished product shipment, however, shrank by 17% YOY to 1.37 million tons.

Iran is currently the world's 10th largest producer of crude steel with a March-February output of 4.46 million tons, according to World Steel Association. The country is placed between Brazil (9th) with 5.58 million tons and Italy (11th) with 4.1 million tons.