According to the Iranian Steel Producers Association (ISPA), in the first five months of this year (March 21 to August 22, 2021), Iran has seen a significant reduction in steel production. ISPA data show that producers produced 10.8 million tonnes of semi-finished products during this period. This amount of production, which has decreased by 12% compared to the previous year, is in the Iranian steel showcase. The drop came as steel mills were forced to cut power consumption during the hot summer amid widespread blackouts. In the following, we will evaluate the decrease in Iran’s steel production in more detail from the perspective of Metal Bulletin. Please be with Artan Press.
*** Reduction of Iranian steel production in an orderly manner
In July, the Iranian government ordered Iranian steelmakers to reduce electricity consumption by at least 50 percent. This had an immediate effect on Iranian steel production as well as the reduction of steel production in Iran. Steel billet and bloom production in the first five months was 6.50 million tons. This figure, which has decreased by 15% compared to the same period in 2020, is significant.
*** Significant decline in slab production in the Iranian market
Slab production decreased by 9% compared to the same period last year and reached 4.33 million tons. Iran’s total final steel production fell 11 percent year-on-year to 7.57 million tons over a five-month period. The decline in Iranian steel production during this period was solely due to power outages. Sanctions have not been very effective in this area. While the production of long steel sections decreased by 7%, 4.29 million tons and the production of steel sheets decreased by 17% and reached 3.28 million tons. This volume of production decline in Iranian statistics has been unprecedented in the last decade.
*** Decreased production of iron concentrate in the last 3 months
According to ISPA, the production of iron concentrate in Iran in March-August 2021 reached 12.36 million tons, which is 4% less than last year. The reduction in electricity supply from July 23 to August 22 led to a decrease in the volume of DRI, billet and bloom exports in the fifth month of Iran. Because these products consume the most power in their production. Annual DRI shipments in the fifth month of last year fell by 30% to 75,000 tons. While the combined export of billet and bloom with 13.2% f, ni. The decrease has reached 363 thousand tons in the same month. The decrease in Iranian steel production in all products can keep the decline in production in the coming months.
*** Decrease in Iranian steel production at the same time as increasing steel exports
During the full five-month period, steel export sales increased significantly. Iran’s domestic market has been without demand due to sharp price fluctuations. The recession in the Iranian steel market is evident in these 5 months. Semi-finished steel shipments increased 39.1 percent to 3.1 million tons, and overseas slab sales more than doubled from 440,000 tons to about 1 million tons. Ship and bloom shipments grew by 16.4 percent to about 2 million tons. It seems that Iran’s steel production will overshadow the inventories in the coming months.
*** Assess the situation of the export market of steel products
Exports of final steel products on an annual evaluation scale reached 1.4 million tons in the first five months of this year. Long steel shipments rose 82.9 percent to 1.1 million tons. While the export of steel sheets more than doubled and reached 265 thousand tons. This amount was 124 thousand tons in the same period in 2020. With all these interpretations, reducing Iran’s steel production is a big risk. Market participants said that although the electricity supply situation in the country has not yet returned to normal. But it has improved a bit so far in September. And with the increasing interest of Chinese customers in imported billets, a number of sales of Iranian materials have improved over the past week.
این مطلب بدون برچسب می باشد.