Iran’s Annual Steelmaking Capacity Close to 40m Tons

EghtesadOnline: The annual capacity of Iranian steel companies has reached 39.82 million tons, according to new data released by the Iranian Mines and Mining Industries Development and Renovation Organization.

News ID: ۷۵۱۶۴۴

06 December 2020

There are 84 steel mills in Iran and its biggest steelmaker, Mobarakeh Steel Company, accounts for 18% of total production capacity with 7.2 million tons per year.

Khuzestan Steel Company comes next with 3.8 million tons, followed by Esfahan Steel Company with 3.6 million tons and South Kaveh Steel Company with 2.4 million tons.

As per the goals set in the 20-Year National Vision Plan (2005-25), Iran seeks to become the world’s sixth largest steelmaker by 2025 with a crude steel output capacity of 55 million tons.

According to Iranian Mines and Mining Industries Development and Renovation Organization, Iran’s steel production capacity is expected to reach 43.6 million tons by the end of the current Iranian year (March 20, 2021), while actual production is estimated to hit 31.1 million tons by utilizing 71% of the nominal capacity.

IMIDRO is a state-run enterprise and Iran's biggest holding company active in the mining sector.

7% Growth in Production

According to the Iranian Steel Producers Association’s latest report, Iranian steelmakers produced 29.77 million tons of semi-finished and finished steel products during the first seven months of the current fiscal year (March 20-Oct. 21) to register a 7.34% year-on-year increase.

Semis accounted for 16.98 million tons of the total output, up 6% YOY.

Billet and bloom made up 10.23 million tons of semi-finished production whereas slab output hit 6.75 million tons to register a 6% and 7% YOY rise respectively.

The output of finished steel increased by 9% YOY to 12.79 million tons.

Long steel products had a 6.49 million-ton share in the output of finished steel products, posting a 14% growth YOY.

Rebar production stood at 5.27 million tons (up 15% YOY). It was followed by beams with 748,000 tons (up 20% YOY) and L-beam, T-beam and other types with 469,000 tons (down 3% YOY).

Production of flat steel picked up during the seven-month period, increasing 4% year-on-year to 6.29 million tons.

Hot-rolled coil made up 5.28 million tons of the production in this category, showing a 4% rise compared with the similar period of last year, followed by cold-rolled coil with 1.594 tons to register a 6% YOY rise and coated coil with 908,000 tons (down 7%).

Offbeat Growth in Consumption

Iran's apparent steel usage—defined as production plus imports minus exports, sometimes also adjusted for changes in inventories—during the first seven months of the current Iranian year stood at 13.749 million tons for semi-finished products, registering a 13% increase compared with last year's corresponding period.

Apparent steel usage stood at 11.93 million tons for finished products, posting a 20% increase year-on-year, according to ISPA.

Flat steel products accounted for the largest portion of finished steel consumption with 5.4 million tons, up 12% YOY.

Among flat steel products, hot-rolled coil had the biggest share of apparent usage with 5.22 million tons (up 8% YOY), followed by cold-rolled coil with 1.69 million tons (up 13% YOY) and coated coil with 990,000 tons (unchanged compared with the same period of last year).

Long steel products accounted for 5.5 million tons of finished steel apparent usage, up 34% YOY.

Rebar grabbed the biggest share in this section with 4.45 million tons, up 39% YOY, followed by beams with 660,000 tons (up 25% YOY) and L-beam, T-beam and other types with 389,000 tons (unchanged compared with the same period of the last year).

As for semis, apparent usage of "billet and bloom" together amounted to 7.78 million tons, up 10% YOY. Usage of slab also increased by 18% to 6.01 million tons during the first seven months of the year.

DRI usage was up 15% to 17.92 million tons.

Taking into account the ongoing stagnation in the country's economy, especially in civil projects and construction sector, many experts believe that the rise in apparent usage is mostly due to speculative activities and hoarding.

Chilanonline, a specialized news website, claims that the rise might be because of illegal steel exports. As per the regulations, steelmakers are required to supply a specified volume to the domestic market before they can export.

23% Decline in Exports

A total of 4.53 million tons of finished and semi-finished steel products were exported from Iran during the seven months under review to register a 23.5% decline year-on-year, the Iranian Steel Producers Association reported.

Semi-finished steel made up 3.19 million tons of the total export volume, down 16% YOY.

Billet and bloom had the lion’s share of semis exports with 2.451 million tons, even though the sum was 6% lower than the previous corresponding period's 2.6 million tons. Slab came next with 740,000 tons, down 39% YOY.

Exports of finished steel products declined by 37% to 1.34 million tons during the first seven months of the year.

Rebar accounted for the largest portion of finished steel products exported from Iran during the seven months, with 834,000 tons. This is while the total volume of Iran’s rebar exports experienced a 40% fall compared with the same period of last year.

Hot-rolled coil came next with 235,000 tons, registering a 20% decrease compared with the first seven months of the previous fiscal year.

Beams exports amounted to 95,000 tons during the period under review, down 10% YOY. Nearly 104,000 tons of L-beam, T-beam and other types were also exported from Iran during the seven-month period, recording a 44% decline YOY.

Coated coil with 52,000 tons, down 54% YOY, and cold-rolled coil with 25,000 tons, down 71% YOY, were other finished steel products exported from Iran.

Exports of direct-reduced iron dropped by 72% YOY to 184,000 tons, ISPA figures show.

50% Rise in Imports

Unlike exports, imports of finished and semi-finished steel products registered an increase during the period under review compared to last year’s corresponding period.

The ISPA report shows that steel imports stood at 486,000 tons, up 50% YOY.

Semis imports, which only consisted of billet and bloom, made up 4,000 tons of the total figure, unchanged compared with the same period of last year. Billet and bloom imports amounted to 3,000 tons, up 50% whereas the import of slab decreased by 50% to 1,000 tons.

Imports of finished steel increased to 482,000 tons, which mainly included HRC with 179,000 tons, up 281%; coated coil with 134,000 tons, up 2%; CRC with 123,000 tons, up 48%; L-beam, T-beam and other types with 24,000 tons, down 20%; rebar with 15,000 tons, down 35%; and beams with 7,000 tons, unchanged compared with the same period of last year's figures.