Iran Steel Giants Earn $6.9 Billion

EghtesadOnline: The last fiscal (ended March 20, 2018) had its ups and downs, but it was propitious for major Iranian exchange-listed steelmakers.

News ID: ۷۴۵۱۴۱

10 April 2018

Increasingly favorable global conditions, rapid capacity expansion and an accelerating drop in the national currency's value against the US dollar all helped them notch significant gains in sales.

The seven steel companies sold over 19.25 million tons of steel products worth 347.3 trillion rials (about $6.94 billion) last year, posting a 16% and 56.21% growth respectively compared to the year before.

A large part of the growth happened in the last month of the year, Esfand (Feb. 20-March 20), as the steelmakers sold a total of 1.98 million tons valued at 44 trillion rials ($880 million), up 14.8 and 68.7% YOY respectively, Financial Tribune reported.

The seven major Iranian steelmakers produced a total of 19.82 million tons of steel products during the fiscal 2017-18, registering a 15.31% growth YOY.

The companies analyzed are all listed on either Tehran Stock Exchange or Iran Fara Bourse. Their production and sales data have been compiled using company reports published on Codal.ir.

> Mobarakeh Remains on Top

Iran’s largest flat steelmaker, Mobarakeh Steel Company, topped the charts in terms of sales value as it sold 158 trillion rials ($3.16 billion) worth of hot-rolled, cold-rolledand coated steel as well as “other” products during the period under review, up 56.3% YOY.

MSC, which is also Iran’s largest steelmaker in terms of capacity, produced a total of 6.85 million tons of steel products last year to post a 13% YOY growth.

Hot-rolled coil was MSC’s main product, with output reaching 4.09 million tons, 4.01 million tons of which were sold valued at 89.06 trillion rials ($1.78 billion). HRC production was up 8.8%, sales volume inched up 0.55% and sales value jumped 44.4% YOY.

Mobarakeh's HRC production growth has remained limited ever since the company stepped back on its export ambitions in 2017. It faced a double whammy of local users decrying reduced domestic output and the European Union erecting tariff walls against shipments to the continent.

The local market has been MSC's target ever since and it hasn't been bad. The commodity price rally in 2017-18 boosted prices on top of a cheaper rial to US dollar rate. With relatively the same production and sales, the steelmaker reaped more profit compared to the year before last.

MSC sold 528,000 tons of steel products worth 17.34 trillion rials ($346.82 million) while it produced 593,000 tons in Esfand to register a 12%%, 33.52% and 68.58% YOY growth respectively.

> KSC Breaks Export Record, Again

Iran’s largest steel exporter, Khouzestan Steel Company, came next as it sold 69.89 trillion rials ($1.397 billion) of bloom and billet, slab and pellet, indicating a 51.46% rise YOY.

KSC’s total output for the period stood at 9.92 million tons with sales volume standing at 4.47 million tons, growing 5% and 28.81% YOY respectively.

The large gap between output and sales is mostly due to KSC’s high pellet production and limited sales, most of which were consumed by the steelmaker.

Exports made up 2.76 million tons of the company’s total sales volume during the period, valued at 48.94 trillion rials ($978 million). This is a new shipment record for the company.

Esfand was also good to KSC, as its sales rose 61.4% during the month to 8.267 trillion rials ($165.3 million). Output grew 12% to 593,000 tons, while sales volume jumped 33.52% YOY to 681,000.

Last month’s exports stood at 263,945 tons valued at 6.13 trillion rials ($122.6 million).

> ESCO Sales Value Grows, as Volume Drops

Esfahan Steel Company's sales rose 34.19% YOY to 44.67 trillion rials ($893.4 million), while output grew by 6% YOY to 2.18 million tons and sales volume dropped 5.32% YOY to 3.28 million tons.

As for Esfand performance, Iran’s oldest steelmaker sold 7.52 trillion rials ($150.4 million) worth of beams, rebar, coils, ingots and other products, up 40.61% YOY. Output grew 8% YOY to 183,983 tons, while sales dropped 11.05% to 422,145 tons.

ESCO is currently grappling with accumulated losses worth 21.4 trillion rials ($455 million), with a nominal capital of 33.18 trillion rials ($706 million).

In what was good news for both ESCO and the government, Iranian Privatization Organization finally succeeded in selling a 16.75% in the steelmaker owned by Iran Steel Pensioners Fund in early March. This was IPO's fifth attempt to sell the block and subsequently a long overdue burden was taken off ESCO's shoulders.

> Other Steelmakers

Hormozgan Steel Company came next, as it sold steel products worth 27.48 trillion rials ($549.6 million) last year, up 79.75% YOY. Its output and sales also recorded solid upticks, as they grew 32% and 25.72% YOY to reach 1.5 and 1.63 million tons respectively.

Next was Khorasan Steel Complex Company with sales growing 75.18% YOY to 18.04 trillion rials ($360.9 million). Production and sales volume stood at 2.62 and 1.14 million tons, rising 18% and 30.84% respectively.

And then there was South Kaveh Steel Company with sales value reaching 18.95 trillion rials ($379.1 million), up 111.16% YOY. Production and sales volume were up 47% and 44.8% YOY to 2.49 and 1.32 million tons respectively.

Iran Alloy Steel Company came last with 10.22 trillion rials ($204.4 million) in sales value, up 40.78% YOY. Production was down 1% YOY to 397,896 tons, as sales volume grew 15.61% YOY to 402,354 tons.