In a newly-released report, OECD has provided an overview of steelmaking capacity developments taking place around the world, providing an assessment of gross capacity additions that could come on stream from 2020 to 2022, based on information available until December 2019.
Reviewing developments in Iran, the report says a total of 2.8 million tons of steelmaking capacity came on stream in 2019.
The largest steelmaking project to come on stream was the Jahan Foolad Sirjan Steel Complex with 1.2 million tons per year. Other notable projects include Bistoun Steel, Arvand Jahanara Steel and Kabkan steel, each with steelmaking capacities of 250,000 tons, 1.2 million tons and 150,000 tons per annum, respectively.
The OECD report noted that there have been some suspensions of projects, such as Aria Zob Steel and Arian Steel, which had originally planned to add capacities in 2019 but stopped construction due to financial issues. Kish South Kaveh Steel, West Alborz Steel and Zarand Iron and Steel postponed to 2020 the launch of new Electric Arc Furnace plants with capacities of 200,000 tons, 1 million tons and 1.7 million tons, respectively.
Kavir Damghan Steel has also indefinitely postponed the launch of a new EAF plant with a capacity of 200,000 tons, which was originally planned for 2019.
While these developments indicate the potential uncertainties surrounding the implementation of investment projects, assuming that all projects currently underway are completed as scheduled, Iran’s nominal crude steelmaking capacity would reach 54.4 million tons by 2022, indicating an increase of 51% compared to the capacity of 36 million tons observed at the end of 2019.
This would make Iran the seventh largest steelmaking country in the world by 2022.
Current World Standing
Iran is currently the world’s 10th biggest crude steel producer.
Iranian steel mills produced 13.89 million tons of crude steel during the first half of 2020 to register a 10.2% rise compared with the corresponding period of 2019, the latest report released by the World Steel Association shows.
Based on the report, the country is placed between Brazil (ninth) with 14.24 million tons of production in H1 and Vietnam (11th) with 10.85 million tons.
Iran’s June output stood at 2.43 million tons to witness a year-on-year growth of 5.3%, according to the Brussels-based international trade body for the iron and steel industry.
Iran aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets annual production capacity expansion to 55 million tons and 20-25 million tons of exports per year by 2025.
Iran’s Role in Middle East Output Jump
The report notes that steelmaking capacity has increased rapidly over the past decade in the Middle East, from 33.1 million tons in 2010 to 65.1 million tons in 2019 (up 96.7%).
The region’s rapid growth is expected to continue over the next few years mainly due to capacity expansions in Iran, according to the report.
Accordingly, steelmaking capacity could increase by an additional 19.6 million tons (up 30.1%) by 2022 compared with the level of 2019, if all the projects that are underway come on stream and in the absence of closures.
Elsewhere in the region, Oman’s Moon Iron and Steel (MISCO) is building a new 1.2-million-ton EAF plant, which is expected to be operational in 2020. At the same time, the construction of a new EAF facility with a capacity of 600,000 tons by Saudi Arabia’s Gulf Tubing Company is facing delays due to financial issues.
Iraq’s United Brothers Holdings is installing new EAF facilities in Basra with the capacity to produce 500,000 tons of crude steel, but the completion time is unclear due to political instability in the country.
Global Status
Global steelmaking capacity (in nominal crude terms) decreased from 2015 to 2018, but the latest available information (as of December 2019) suggests that capacity increased in 2019 for the first time since 2014.
The net capacity change in 2019, taking into account new capacity additions and closures, brings current global steelmaking capacity to 2.36 billion tons, representing a 1.5% increase from the level at the end of 2018.
Information on announced investment projects suggests that, globally, 58.2 million tons of gross capacity additions are currently underway and could come on stream during 2020-22. An additional 20.1 million tons of capacity additions are currently in the planning stages for possible launch during the same period.
Asia, like the Middle East, may also experience a considerable increase in steelmaking capacity over the next few years, if all the projects currently under way or planned are ultimately realized.
Over 27 million tons and 19 million tons of gross capacity additions are currently underway during 2020-22 in Asia and the Middle East, respectively, with an additional 3 million tons and 6 million tons in the planning stages in these regions, respectively.
Europe, NAFTA, Africa, the CIS and Latin America could also see an increase in capacity, with 3.7 million tons, 3.3 million tons, 1.9 million tons, 1.9 million tons and 200,000 tons of gross additions currently underway in each region, respectively.
Additionally, there are plans in each of these regions to add several million tons of capacity during the three-year period. Currently, there are no capacity investment projects in Oceania.
The Secretariat of OECD Steel Committee provides monitoring reports on crude steelmaking capacity developments on a regular basis, using a wide range of publicly available and commercial data sources. It monitors capacity developments on an ongoing basis and updates its capacity figures to reflect publicly available information on capacity closures and new information on the status of investment projects.
Capacity Expansion on Track
The Iranian Mines and Mining Industries Development and Renovation Organization's latest report on development of under-construction steel production units shows a total of 19.1 million tons will be added to Iran’s annual steel production capacity by the time the development of all these units is complete in the fiscal 2023-24.
“Iran's current steel production capacity stands at over 35 million tons per year,” said former deputy industries minister, Jafar Sergheini.
Iran aims to increase its steel production capacity to 55 million tons by March 2025, as part of a 20-year Vision Plan designed for the strategic industry.
The addition of 19.1 million tons by the time the under-construction projects come on stream to the current capacity means the aggregate output capacity will reach 54.1 by March 2024—only 900,000 short of the target, for reaching which Iranian steelmakers will have one further year.