Iran Remains World’s 10th Biggest Steel Manufacturer

EghtesadOnline: Latest data released by the World Steel Association show Iran’s steel output has declined, yet the country’s global standing remains unchanged.

News ID: ۷۸۷۵۱۲

27 December 2021

Iranian steel mills produced a total of 25.7 million tons of crude steel from the beginning of 2021 up to the end of November, registering a 3.4% decline compared with the corresponding period of 2020.

Iran's November output hit 2.7 million tons, down 5.2% year-on-year.

Despite the decline in output, Iran maintained its global status as the world’s 10th biggest crude steelmaker.

China was the world’s largest producer in the 11-month period with 946.4 million tons of steel output, down 2.6% YOY.

It was followed by India with 107.3 million tons (up 19.3%), Japan with 88.4 million tons (up 16.8%), the United States with 78.8 million tons (up 18.9%), Russia with 69.7 million tons (up 7.1%), South Korea with 64.6 million tons (up 5.6%), Germany with 36.9 million tons (up 13.5%) and Turkey with 36.7 million tons (up 13.4%).

Iran is placed after Brazil (ninth) with 33.4 million tons (up 17.4% YOY).

The world’s 64 steelmakers produced 1.75 billion tons of steel over the 11 months under review, up 4.5% YOY. Countries located in Asia and Oceania collectively produced 1.26 billion tons of the total.

The Middle East produced 37.4 million tons of crude steel in the 11 months under review, posting a decrease of 0.3% compared with the same period of last year.

Global steel output also experienced a 9.9% decline in November to 143.3 million tons.

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 industrial associations, with members in every major steel-producing country. Worldsteel represents steel producers, national and regional steel industry associations and steel research institutes. Members represent around 85% of global steel production.

The 64 countries included in this table represent 85% of global steel production.

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

Power Restrictions

Power outages and restrictions imposed on steelmakers in the past few months have affected steel output.

The Ministry of Oil and National Iranian Gas Company are putting pressure on steelmakers and mining firms to drastically cut their gas consumption, according to a report by Persian daily Jahan-e-Sanat.

Specifically, Chadormalu Mining and Industrial Company has been asked to keep its gas consumption below 30,000 cubic meters per day until further notice. As the quota is less than 1% of the heavyweight mining firm’s gas consumption under normal conditions, the restriction practically means cessation of production in Chadormalu, inflicting huge losses in lost production.

The report also noted that certain companies have been restricted for longer periods, while others will be less affected.

Producers of direct-reduced iron are the prime target of the new restrictions due to their energy-intensive nature. Since DRI is considered a strategic and key product in the steel industry, the measure will impact the entire steel production chain and lead to a massive decline in output of steel products and rising prices in the market.

With the decline in temperature across Iran, gas consumption in households marked a record high.

This is not the first time that industries, especially steelmakers, are facing power restrictions. In the summer of the current fiscal year (June 22-Sept. 22), steel production declined by 40% compared with the previous quarter (March 21-June 22) due to electricity cuts amid a record high domestic consumption.

In a letter to the Supreme National Security Council, ISPA has put steel mills’ losses due to power outages at $6 billion from the beginning of the current Iranian year (March 21) to Sept. 12.

According to ISPA, 82 days of production were lost during the period due to power outages and 300,000 direct and indirect jobs were lost or restricted, the news portal of the association reported.

Summer demand led to a severe power and water shortage in most regions, resulting in blackouts and dry taps.

The new record came as high temperatures nationwide drove general electricity consumption to new heights in summer, prompting authorities to prioritize domestic users over industries in supplying power.

As the manufacture of steel and cement is an energy-intensive process, related factories were subsequently restricted by the Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) and have been only allowed to work at a fraction of their capacity during specified periods.

According to Tavanir Spokesman Mostafa Rajabi-Mashhadi, summer electricity restrictions on industries were removed as of Sept. 23.

Crude Steel Production Capacity Tops 40m tons

The installed capacity of crude steel production in Iran has exceeded 40 million tons per year, according to Deputy Industries Minister Vajiollah Jafari.

“Annual production of steel ingots has exceeded 30 million tons,” Jafari was also quoted as saying by IRNA during the 8th Steelprice Conference held recently.

“The installed capacity in the domestic steel industry is about 36 million tons of direct reduced iron, 66.7 million tons of pellets and 62.7 million tons of [iron ore] concentrate, but at the same time we are facing problems in supplying raw materials,” he added.

The official said the target capacity of 55 million tons of steel ingots is expected to be achieved in the fiscal 2025-26, of which 40 million tons have been realized so far and 7 million tons will be added in the current fiscal year (March 2021-22).

Jafari noted that $21.5 billion have been invested in the steel industry, of which $19 billion have been installed.

Electricity required by steel industry is at 8,000-9,000 megawatts, of which 6,000 megawatts are currently in use and a further 12,500 megawatts are required for development projects.