Iranian Steel Companies Register Strong Growth in Output, Exports

EghtesadOnline: The Iranian steel industry recorded strong growth rates both in production and exports during the first month of the current fiscal year (March 20-April 20).

News ID: ۷۸۶۴۹۹

29 May 2021

Iranian steelmakers produced a total of 4.5 million tons of semi-finished and finished steel products during the period.

According to the Iranian Steel Producers Association’s latest report, semis accounted for 2.8 million tons of the total output, up 20% YOY.

Billet and bloom made up 1.675 million tons of semi-finished production whereas slab output reached 1.13 million tons to register a 28% and 9% YOY rise, respectively.

The output of finished steel also increased by 20% YOY to 1.74 million tons.

Long steel products had a 939-ton share in the output of finished steel products, posting a 42% growth YOY.

Rebar production stood at 759,000 tons (up 46% YOY), which was followed by beams with 108,000 tons (up 27% YOY) and L-beam, T-beam and other types with 72,000 tons (up 31% YOY).

Production of flat steel picked up during the month under review, 1% year-on-year to 810,000 tons.

Hot-rolled coil made up 794,000 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 205,000 tons, up 4% YoY; and coated coil with 124,000 tons (up 70%).

Iran's output of direct reduced iron also grew by 15% to 3.02 million tons, ISPA data show.

MSC Tops the List

Mobarakeh Steel Company, the largest steel producer in Iran, recorded further growth in semi-finished steel output during the first month of the current fiscal year (ended April 20).

By producing 972,276 tons of semi-finished products, the company topped the list of Iranian steel mills.

Mobarakeh also topped the list of steel producers in finished steel products. MSC and its subsidiary Saba Steel produced 718,900 tons of finished steel during the month under review, according to the latest figures released by Iranian Mines and Mining Industries Development and Renovation Organization.

Located in southwestern Isfahan, Mobarakeh Steel Company is the biggest steel producer in Iran and the Middle East and North Africa region.

MSC produced more than 700,000 tons of slab during the month, which is the highest monthly output recorded in the company’s history. The number is 38,000 tons higher than the previous month’s output, according to MSC officials.

In terms of semis production, MSC was followed by Khuzestan Steel Company with 330,000 tons of output during the month.

Esfahan Steel Company came next with 216,840 tons of semis output during the first month of the year.

South Kaveh Steel Company with 148,080 tons, Chadormalu Steel Company with 105,435 tons and Khorasan Steel Company with 105,300 tons were other main producers of semi-finished products during the month.

The heavyweight Iranian steel mills under the IMIDRO study collectively produced 22.54 million tons of semi-finished products in the last fiscal year, recording an 8% growth year-on-year.

In terms of production of finished products, MSC was followed by ESCO with more than 201,000 tons.

Other key producers of finished products were Khorasan Steel Company, Bonab Sheet Company, Ahvaz Rolling and Pipe Manufacturing Company, Azarbaijan Steel Company, Sirjan Steel Company and INSIG.

A total of 14.58 million tons of finished steel products, including hot- and cold-rolled coils, rebar, beams, pipes, wide and galvanized sheets, were produced by heavyweight steelmakers during the previous fiscal year, up 3% YOY.

Exports

A total of 831,000 tons of finished and semi-finished steel products were exported from Iran during the period under review, considerably higher than the previous year’s similar period.

Semi-finished steel made up 566,000 tons of the total export volume, up 35% YOY.

Billet and bloom had the lion’s share of semis export with an aggregate of 535,000 tons, 215% higher than the previous corresponding period's 84,000 tons. Slab followed with 31,000 tons, down 56% YOY. Iranian steelmakers exported 71,000 tons of slab during the same period of the previous year.

Exports of finished steel products also jumped by 215% to 265,000 tons during the month.

Rebar accounted for the largest portion of finished steel products exported from Iran during the period, with 204,000 tons. The total volume of Iran’s rebar exports experienced a 204% growth compared with the same period of last year.

Hot-rolled coil came next with 21,000 tons, registering a 250% growth compared with the year before.

Beams exports amounted to 16,000 tons during the period, up 700% YOY. Nearly 18,000 tons of "L-beam, T-beam and other types" were also exported from Iran during the period, recording a 500% rise YOY.

Coated coil with 6,000 tons, up 100% YOY, was the other finished steel products exported from Iran.

Exports of direct-reduced iron increased by 250% YOY to 70,000 tons, ISPA figures show.

Imports

Imports of finished and semi-finished steel products marked lower jumps during the period under review. The ISPA report shows that steel imports stood at 53,000 tons, up 10% YOY.

Iran did not import semi-finished steel products during the month.

Imports of finished steel jumped by 10% YOY to 53,000 tons. The imports mostly included HRC with 16,000 tons, up 7%; CRC with 17,000 tons, up 6%; coated coil with 14,000, down 7%; L-beam, T-beam and other types with 3,000 tons, up 200%; and rebar with 3,000 tons, up 200%.

Apparent Steel Usage

Iran's apparent steel usage — defined as production plus imports minus exports, sometimes also adjusted for changes in inventories — during the first month of the current Iranian year (started March 21) amounted to 2.23 million tons for semi-finished products, registering a 7% increase compared with last year's corresponding period.

Apparent usage totaled 1.53 million tons for finished products, posting 8% increase year-on-year, according to the Iranian Steel Producers Association.

Flat steel products accounted for the largest portion of finished steel consumption with 814,000 tons, down 1% YOY.

Among flat steel products, hot-rolled coil had the biggest share of apparent usage with 789,000 million tons (down 1% YOY), followed by cold-rolled coil with 222,000 tons (up 6% YOY) and coated coil with 113,000 tons (up 53%) compared with the same period of last year.

Long steel products accounted for 707,000 tons of finished steel apparent usage, up 20% YOY.

Rebar grabbed the biggest share in this section with 558,000 tons, up 23% YOY, followed by beams with 92,000 tons (up 11% YOY) and L-beam, T-beam and other types with 57,000 tons (up 11%) compared with the same period of last year.

As for semis, apparent usage of billet and bloom together amounted to 1.14 million tons, unchanged compared with the same period of last year. Usage of slab also increased by 14% to 1.09 million tons during the first month of the year.

DRI usage gained 13% to 2.95 million tons, during the period under review.

World’s 10th Biggest Producer

Iranian steel mills produced 10 million tons of crude steel in the first four months of 2021, which indicate a 9.6% rise compared with 2020.

As per the latest report released by the World Steel Association, Iran's April output amounted to 2.5 million tons, up 6.4%.

The report ranks Iran as the world’s 10th biggest crude steel producer. China was the world’s largest crude steel producer in the four-month period with 374.6 million tons of steel output, up 15.8% YOY.

It was followed by India with 38.2 million tons (up 26.9%), Japan with 31.5 million tons (up 2.7%), the United States with 27.3 million tons (up 2.8%), Russia with 25.5 million tons (up 7.1%), South Korea with 23.4 million tons (up 6.5%), Germany with 13.5 million tons (up 9%) and Turkey with 13.1 million tons (up 16.9%).

Iran is placed after Brazil (ninth) with 11.8 million tons, 15.9% higher than the corresponding period of 2020.

The world’s 64 steelmakers produced a total of 662.8 million tons of steel over the four months, up 13.7% YOY. States located in Asia and Oceania collectively produced 487.8 million tons of the total.

The Middle East produced 14.1 million tons of crude steel in the four months under review, posting an increase of 18.2% compared with the same period of last year.

Global steel output experienced a 23.3% growth in April to 169.5 million tons.

The world's major steel producers seem to have recovered their output in 2021, after the global closure of businesses and disruption in industrial operations, as a result of Covid-19 transmission in early 2019.

Global output is expected to keep rising in the coming months as coronavirus restrictions ease and high prices encourage production, according to Reuters, which says the 23% growth is exaggerated due to closures a year ago when the pandemic was at its height.

"The year-on-year growth rate is flattered by base effects," Caroline Bain, chief commodities economist at Capital Economics, said in a note.

"That being said, by our calculations, daily global steel output rose by close to 3.5% month-on-month in April ... in large part owing to high and rising global steel prices."

Lower month-on-month output in India was offset by large gains in China, Russia and Brazil, she added.

Crude steel output from China, the world's top producer and consumer of the metal, gained 7.5% in April compared with March, the World Steel Association data showed, despite efforts by authorities to dampen output to curb carbon emissions.

Bain said renewed pandemic restrictions were likely behind the 14.4% month-on-month drop in Indian steel production and the 2% dip in European Union output.

The association, a group of producers that accounts for about 85% of global steel output, last month upgraded its global demand forecast to a rise of 5.8% this year.

"A number of capacity expansions and restarts have been announced, particularly in the US and India. Accordingly, we expect global steel production to rise this year, which will ultimately lead to lower regional prices," Bain said.

Crude steel is defined as steel in its first solid (or usable) form: ingots and semi-finished products (billets, blooms and slabs). This is not to be confused with liquid steel, which is steel poured.

The World Steel Association is one of the largest and most dynamic industry associations in the world, with members in every major steel-producing country. Worldsteel represents steel producers, national and regional steel industry associations, as well as steel research institutes.

Members represent around 85% of global steel production. Its 64 member countries represent around 85% of global steel production.

Iranian steel mills produced a total of 29.02 million tons of crude steel in 2020, which indicate a 13.35% rise compared with 2019, the highest growth in output in the list of the world's top 10 producers.