Steel Exports Dip 31% YOY to 2.2 Million Tons in 4 Months

EghtesadOnline: More than 2.23 million tons of finished and semi-finished steel products were exported from Iran during the first four months of the current Iranian year (March 20-July 21), registering a 31.83% decrease compared with the similar period of last year, according to the Iranian Steel Producers Association's latest report.

News ID: ۷۵۰۷۴۱

19 August 2020

Semi-finished steel made up 1.66 million tons or more than 74.46% of the total export volume to register a 23% year-on-year drop.

Billet and bloom had the lion’s share of semis exports with an aggregate of 1.34 million tons to mark a 2% decline YOY. Slab followed with 322,000 tons, down 59% YOY.

Exports of finished steel products decreased 49% YOY to reach 571,000 tons.

Long steel products had the biggest share of finished steel exports with a total of 491,000 tons (85.9%) to register a 40% YOY decline.

Rebar was the main exported product in this category with 407,000 tons, registering a YOY fall of 42%, followed by L-beam, T-beam and other types with 46,000 tons (down 32% YOY) and beams with 38,000 (down 32% YOY).

The export of flat steel products amounted to 80,000 tons during the period, indicating a YOY drop of 74%.

Hot-rolled coil grabbed the lion’s share in this category with 46,000 tons to witness a 77% decrease YOY.

Next was coated coil with 22,000 tons, down by 62% YOY, and cold-rolled coil with 12,000 tons, down 76% YOY.

Exports of direct-reduced iron fell 85% YOY to 62,000 tons.

Major Exporters

With 404,507 tons of exports during the four-month period (down 43% YOY), Khouzestan Steel Company was Iran's biggest exporter during the four months under review.

Esfahan Steel Company (ESCO) was the second biggest exporter, as it shipped out 282,999 tons of products, down 22% compared with last year's corresponding period.

Mobarakeh Steel Company ranked third, as it exported 127,930 tons during the four months, down 75% 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 period under review, Hormozgan Steel Company exported 148,077 tons of slabs, down 35% YOY. South Kaveh Steel Company exported 135,000 tons of billets, down 45% YOY.

Chadormalu Steel Company exported 107,167 tons of slab in the four months, up 45% YOY. Khorasan Steel Company came next with 29,998 tons of bloom in the four months, down 66% YOY. The company also shipped out 319 tons of rebar, plunging by 93% YOY.

Imports Up 92%

The new ISPA report also shows imports of finished steel products stood at 279,000 tons in the four months under review, to register a 92% YOY increase.

The imports mostly included flat steel products with 257,000 tons, up 142% YOY. Hot-rolled coil was the top product in this category with 116,000 tons, up 364% YOY, followed by cold-rolled coil with 72,000 tons, up 100% YOY, and coated coil with 69,000 tons, up 53% YOY.

Imports of long steel products stood at 22,000 tons, indicating a 44% decline YOY. L-beam, T-beam and other types accounted for 12,000 tons of the imports (down 40% YOY), followed by rebars with 8,000 tons, down 43% YOY, and beams with 2,000 tons (down 60% YOY).

Semi-finished steels’ share of imports was restricted to the meager amount of 1,000 tons of billet and bloom during the four months, posting no change YOY.

Steel Output at 16.7m Tons

Iranian steelmakers produced 16.74 million tons of semi-finished and finished steel products during the four months under review to register a 7.22% year-on-year increase, according to another ISPA report.

Semi-finished steel made up 9.48 million tons of the total output, up 9% YOY.

Billet and bloom made up 5.56 million tons of semi-finished production while slab output hit 3.92 million tons to register an 8% and 10% rise respectively YOY.

The output of finished steel increased by 5% YOY to reach 7.26 million tons.

Flat steel products had the lion’s share of finished steel production with 3.56 million tons, down 1% YOY. Hot-rolled coil made up 3.05 million tons of the production in this category, showing a 1% rise compared with the similar period of last year, followed by cold-rolled coil with 904,000 tons that also registered a 4% rise YOY and coated coil with 470,000 tons (down 12% YOY).

Long steel products had a 3.7 million-ton share in the output of finished steel products, posting an 11% growth YOY. Rebar had a major share with 3.02 million tons (up 12% YOY), followed by beams with 413,000 tons (up 12% YOY) and L-beam, T-beam and other types with 261,000 tons (down 3% YOY).

US Sanctions

The US has broadened the scope of its sanctions on steel, stainless steel, aluminum and copper trade with Iran in a move to stop imports into the country of specialized metals that it says could be used in Iran's nuclear, ballistic missile and military programs, S&P Global Platts reported.

Most of the products had already been targeted by secondary sanctions against Iran, previously published by the US. The latest list gives more detailed descriptions of some of the products previously included in more general categories.

US Secretary of State Mike Pompeo late July 30 announced that the US State Department has identified 22 materials that it alleges are used in connection with Iran's nuclear, military, or ballistic missile programs. "Those who knowingly transfer such materials to Iran are now sanctionable, pursuant to Section 1245 of the Iranian Freedom and Counter-Proliferation Act," Pompeo said in a statement.

The sanctions also cover trade in graphite and raw or semi-finished metals that may be used in Iran's construction sector which, according to the US, is controlled by Islamic Revolutionary Guard Corps.

"The IRGC's construction firm and many of its subsidiaries remain sanctioned by the United Nations because they were directly involved in the construction of the uranium enrichment site at Fordow," Pompeo said.

The 22 products included on the new sanctions list, deemed to be used in connection with Iran's nuclear, military, or ballistic missile programs, are: aluminum 319, 1100, 225, 6061, 6063, 6082 and 7075; aluminum bronze alloy UNS C63600 (CDA alloy 636); aluminum oxide (Al2O3); steel 302, 4130; stainless steel 321 and 316; A877 steel and A228 steel,100Cr6-52100 steel, 350 maraging steel (also known as maraging steel350); 300 maraging steel (also known as maraging steel300); UNS Cl7200-TDO1 (beryllium copper); UNS C37000 – CuZn38Pb1; tungsten copper and aluminum powder with purity above 98%.

No official reaction was available from Iran on July 31 due to a local holiday. However, an informed Iranian observer told S&P Global Platts that "the new sanctions are not taken very seriously because all of the metals were previously under the OFAC [Office of Foreign Assets Control] sanctions".

The supply and trade of steel, aluminum, graphite and coal with Iran have been restricted by US secondary sanctions from August 2019, but Iran's metals and minerals export trade has continued since then; in fact, its steel exports have increased as they are competitive.

Secondary sanctions mean that any third parties involved in that trade are subject to US sanctions.

No information was given on who the current suppliers of these products to Iran are, and the Iranian observer consulted said he was unable to specify origins, as this is classified information within Iran.

Following the previous imposition of secondary metals trade sanctions, the US stepped up its sanctions on Iran in the steel area in January 2020, imposing sanctions on exports from most of Iran's steelmakers and international steel traders that have links to Iran.

Iranian sources say Iran's steel and metals trade had carried on largely as normal, in spite of both of these sets of sanctions, as much of the metals trade with Iran is with Chinese, other Asian and Middle Eastern parties that have not considered the US sanctions to be applicable to their activities.

Much international metals trade with Iran is channeled and paid for via traders in offshore locations, including Dubai in the UAE, with those involved reportedly often turning a blind eye to details on suppliers and end-customers, as long as the product is of acceptable quality and price.