Iran Steel Producers Association believes that the country will have a steel surplus of around 14-15mn mt in the current year. Exporting this excess could, therefore, help the country maintain its position as the 10th largest producer of steel in the world and earn foreign exchange to help ease the economic repercussions of the pandemic.
The country in May imposed restrictions on steel exports mandating mills to supply 60pc of their output to the Iran Mercantile Exchange. Producers can export 25pc of the production only after meeting this requirement.
Total steel production in Iran stood at 7.14mn mt in the Q1 (March 21 to June 20, 2020) of the ongoing Iranian year, up by 3pc from the prior-year quarter, as per the data released by Iranian Steel Producers Association. Of this, the output of billets and blooms was at 4.12mn mt, a fall of 3pc from the prior-year period. Slab production stood at 315,000mt, which was up by 12pc from the prior-year quarter.
Production of steel products in the period stood at 5.33mn mt, an uptick of 1pc or 64,000 from last year. Of this, long steel sections registered a growth of 4pc from last year. Among long steel products, output for rebar increased by 5pc, beams decreased by 1pc.
The output of hot and cold-rolled sheets both registered a marginal rise of 1pc to 2.29mn mt and 655,000mt, respectively. Production of coated sheets decreased by 25pc to 322,000mt. Total flat steel section production fell by 1pc to 2.67mn mt.
Production for Direct Reduced Iron or sponge iron in the quarter increased by 12pc to 8.13mn mt. According to the association, the steel production chain last year faced a shortage of sponge iron. This year, however, with the domestic consumption hit due to COVID-19, the country is likely to face a glut of steel and steel products.