Iranian Steelmakers Retain 10th Global Ranking in 2021

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

News ID: ۷۸۷۶۹۶

29 January 2022

Iranian steel mills produced a total of 28.5 million tons of crude steel in 2021, registering a 1.8% decline compared with 2020.

The country's December output hit 2.8 million tons, up 15.1% 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 12-month period with 1.03 billion tons of steel output, down 3% YOY. It was followed by India with 118.1 million tons (up 17.8%), Japan with 96.3 million tons (up 14.9%), the United States with 86 million tons (up 18.3%), Russia with 76 million tons (up 6.1%), South Korea with 70.6 million tons (up 5.2%), Turkey with 40.4 million tons (up 12.7%) and Germany with 40.1 million tons (up 12.3%).

Iran is placed after Brazil (ninth) with 36 million tons (up 14.7% YOY).

The world’s 64 steelmakers produced 1.91 billion tons of steel in the year under review, up 3.6% YOY. Countries located in Asia and Oceania collectively produced 1.38 billion tons of the total.

The Middle East produced 41.2 million tons of crude steel in the period, posting an increase of 1.2% compared with the same period of last year.

Global steel output also experienced a 3% decline in December to 158.7 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

The decline in steel output is due to the power outages and restrictions imposed on steelmakers in the past months.

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

Specifically, Chadormalu Mining and Industrial Company has been asked to keep its gas consumption below 30,000 cubic meters per day until further notice. Since 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.

It went on to say that producers of direct reduced iron are the prime target of the new restrictions due to their energy-intensive nature, adding that 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 raise prices.

With the decline in temperature across Iran, gas consumption in households has set 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 (July 23-Sept. 22), steel production declined by 40% compared with the previous quarter (March 21-June 22) due to electricity cuts amid 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, 2022) to Sept. 22.

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 summer in most regions, resulting in blackouts and dry taps.

The 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 steel is an energy-intensive process, related factories were 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 within specified hours of the day.

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

Crude Steel Production Capacity

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

“The 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 noted that 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 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 the 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.