In the outgoing year, marked by
the removal of international sanctions, the export of steel products from Iran
gained momentum and turned the country from a net steel importer into a net
exporter.
Over the first seven months of the current Iranian
year (March 20-October 21, 2016), the export of steel products totaled 3.3
million tons, according to the Iranian Steel Producers Association.
This is up almost 50% on the 2.22 million tons
exported in the corresponding period of a year earlier.
Meanwhile, imports of steel products totaled 1.96
million tons.
Semi-Finished Steel as a Driver
The growth in export volumes was driven mainly by
semi-finished steel products’ shipments, which accounted for 2 million tons
over the period-up 103% year-on-year.
Of this figure, 1.40 million tons were in the form of
billet and the remaining 600,000 tons as slab.
“Most of our billet exports were concentrated in the
Middle East markets, while Far East markets rendered support to slabs,” a
source from Khouzestan Steel Company, Iran’s largest semis exporter, who
targets shipments of 1.85 million tons this year, told Metal
Bulletin.
Higher prices from China were one of the factors that
supported Iranian exporters this year.
“The fact that Chinese exporters stopped following a
cheap export strategy provided more space for our products,” the source added.
However, another factor that spurred the increase in
semis export this year was growing steel-making capacities and steel output
amid still-weak consumption in the domestic market, predominantly of long
products.
“Large mills moved to export markets to provide more
space to smaller ones,” one market player said.
Overall, this Iranian year, the country’s semis
exports were expected to reach 3.4 million tons, against 1.7 million tons last
year, Metal Bulletin learnt earlier on the sidelines of its Second
Iranian Iron and Steel Conference in Isfahan.
Finished Steel Exports Lose Steam
Finished steel export volumes, which are dominated by
hot-rolled coils, may not reach the projected annual figure of 2.5 million
tons.
One of the main reasons is protective policies
against Iranian coils in major sales outlets–the European
Union and Thailand.
“In the past couple of years, due to [the dumping of
cheaper steel products from] China, marketing finished steel has become more
difficult,” Bahador Ehramian, a board member of the Iranian Steel Producers
Association, said earlier in October.
Another reason for the slowdown in HRC export
growth is increased consumption in the domestic market due to the hike in
import duties from 10% to 20%.
“The priority of Mobarakeh Steel Company is to meet
the needs of Iran’s downstream manufacturers, while export is of secondary
importance,” Mahmoud Akbari, the deputy head of sales at Iran’s largest flat
steel producer, said in October.
Over the first seven months of the current Iranian
year, the country exported around 1.3 million tons of finished steel products,
with 850,000 tons pertaining to HRC–up 2% year-on-year.
However, since then, MSC’s flat steel exports have
dried up, according to a source close to the company.
Thus, to reach its annual export target of 5.5
million tons of steel products, Iran may increase the sale of semi-finished
steel and value-added flat products.
“HRC may be replaced by exports of slab and coated
coils,” the source added.
MSC, however, did not comment on possible changes in
its export sales strategy this Iranian year.
financialtribune