Iran Steel Heavyweights See 19% Decline in Exports

EghtesadOnline: Major Iranian steelmakers exported a total of 4.71 million tons of semi-finished and finished steel products during the 10 months to Jan. 20 to register a year-on-year decline of 19%, latest data released by the Iranian Mines and Mining Industries Development and Renovation Organization show.

News ID: ۷۴۶۶۸۵

13 February 2019

The steel mills shipped out 349,597 tons during the tenth month of the year (Dec. 22-Jan. 20), which shows a 49% decline compared with the same month of the previous year.

KSC Tops the Chart

With a total of more than 1.84 million tons of exports over the 10 months and 175,971 tons in the tenth month under review, Khouzestan Steel Company was Iran's biggest exporter of steel.

Nonetheless, the mill experienced a decline both during the 10 months as well as the tenth month, according to Financial Tribune.

KSC exported 733,578 tons of bloom and 438,855 tons of billet during the 10 months–down 24% and 35% respectively YOY. The company’s export of slabs witnessed a 15% year-on-year growth to 667,710 tons. KSC saw an overall 17% YOY decline in total exports over the 10 months.

All of KSC's exported products registered a decline during the tenth month. The company exported 88,311 tons of bloom, down 16% YOY, 35,094 tons of billet, down 44% YOY and 52,566 tons of slabs, down 35% YOY over the month to Jan. 20. KSC saw an overall 29% YOY decline in total exports during the month (175,971 tons).

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

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

Largest Steelmaker Ranks 2nd

Mobarakeh Steel Company, located in Isfahan, exported 755,945 tons of products during the 10 months under review to register a 14% 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.

During the tenth month, MSC joined all other steel heavyweights in Iran in registering decline. It shipped out 8,358 tons abroad, which saw a 91% decline YOY.

All exported products experienced decline during the month under review.

ESCO in Third Spot

Esfahan Steel Company (ESCO) exported 738,868 tons during the 10 months, down 20% YOY.

The company registered YOY growth in the category of beam. The 125,935 tons of beam that the mill exported saw an increase of 8% YOY.

The major Iranian steel exporter shipped out 84,734 tons of beams, down by 2% YOY, 29,979 tons of coils, down by 44%. Its ingot exports stood at 498,220 tons, unchanged compared to last year's corresponding period.

Khouzestan Steel Company was Iran's biggest steel exporter.

During the month from Dec. 22 to Jan. 20, ESCO exported 62,492 tons to register a year-on-year fall of 46%.

The company saw a decline in monthly exports across all categories of its products. ESCO shipped out 1,712 tons of beam during the tenth month, registering a YOY decline of 70%. It exported 3,849 tons of rebar, down 149% YOY.

Exports of ingots amounted to 56,931 tons, remaining unchanged YOY.

Other Producers

During the 10 months of the current Iranian year, all other producers, including Hormozgan Steel Company and Khorasan Steel Company, registered downturns.

The former exported 530,165 tons of slab, down by 44% YOY while the latter exported 55,651 tons of rebar, which was down by 49% YOY.

Khuzestan Oxin Steel Company shipped out 13,340 tons of steel sheets, down 13% YOY. This is while Iran Alloy Steel Company exported 38,831 tons of rebar, going down 34% YOY.

South Kaveh Steel Company also shipped out 561,500 tons of billet, indicating a 9% decline YOY.

Disrupted by Sanctions

Iran's steel exports, among other commodities, have come under immense pressure after the imposition of US sanctions last year.

According to Chairman of Board of Iranian Mines & Mining Industries Development & Renovation (IMIDRO) Khodadad Gharibpour, Iranian steel industry is an export-oriented one in that the country exports more than 40% of its steel productions.

"I think that’s the key question for every Iranian steel producer because export is one of the most important ratio in their production because on the one hand, consumption within Iran is not growing fast enough to feed all the nominal capacities coming up and on the other hand, you not only have US sanctions, but you also have anti-dumping duties," Joachim Schroder, chairman of RCG Research & Consulting Group AG, said.

Schroder was interviewed by Financial Tribune on the sidelines of the ninth edition of "Iranian Steel Market Conference", also known as ISMC 2019.

According to World Steel Association, Iran is the world's tenth biggest producer of steel.

Iran aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets annual production capacity expansion to 55 million tons and 20-25 million tons of exports per year by 2025. Iranian steel mills have so far realized just over 30 million tons of the capacity target.

The European Union announced definitive anti-dumping duties on the import of hot-rolled coil from Iran and three other countries in October 2017.

"I think there are two kinds of solutions. There are still markets in Africa and Southeast Asia, which have insufficient domestic production so there are some selective markets still open. That’s one way and the other way I think is to look for cooperation because the big asset of Iranian steel industries that, together with CRS (cold-roll sheet) producers, have the lowest production cost and that is something where you can probably develop your business model," Schroder said.

"For instance, you ship semi products like slabs or billets and then you cooperate closely with steelmakers because most of the countries don’t put any anti-dumping on semi products so that is a, not today or tomorrow, but that is a long-term strategy I would suggest for the big players in the market."

The two-day "ISMC 2019", which concluded on Jan. 30, gathered hundreds of people, including steel and mining industry veterans and government officials.

The annual event, a brainchild of Donya-e-Eqtesad Media Group, the parent company of Financial Tribune, is organized to discuss challenges and opportunities facing Iran's steel industry.

This year, perhaps, the challenging part has grabbed more attention amid the new round of US sanctions imposed against the Islamic Republic with the aim of restricting Iran's trade with the world.