Iran’s steelmaking performance last year was a long way from the global trend. Although Corona has cast a heavy shadow over the world’s major economies, Iran’s steel sector has been able to maintain its upward trend this year and, despite the global decline in steel production, has seen unprecedented records in the steel sector. In this memo, we will discuss Iran’s steel production record this year and compare it with last year. Please be with Artan Press.
According to the reports of the World Steel Association, which annually evaluates the performance of steelmakers around the world with various details and indicators. Iran’s crude steel production growth reached 28% in October 2020. This growth came as a shock to all global analysts while all international steelmakers were at a loss. Meanwhile, US sanctions on Iran’s industrial sector had severely challenged its export and production capacity. Iranian steel producers also had 12.6% more steel production in the first 10 months of this year than in the same period last year.
*** Steel production record from the perspective of the World Association
The latest statistics from the World Steel Association show that while the average growth of crude steel production in the world over the past year has been negative and steel production worldwide has experienced a downward trend with a slope of 2%, Iran with a growth of 12.6%, close to It has produced 23 million and 800 thousand tons of steel.
One of the reasons for Iran’s growth and success is self-sufficiency in production and high supply chain and steel value chain. Because the mining and industrial sectors worked together in the most coordination with each other, which resulted in creating a historic record in the field of steel production this year. Iran’s crude steel production from the beginning of January to the end of October reached 2 million 660 thousand tons, which is 27.9% more than the same month last year.
*** Political factors affecting steel production
One of the things that will affect the performance of steel companies this year outside the equations of steel production and production is the issue of the new US administration and the approach that the Biden administration will have towards Iran. The US presidential election and the election of Joe Biden as president , Has provided the ground for the fall of the dollar rate in our country. This can reduce production costs for Iran.
Although the devaluation of the dollar is not attractive for export purposes, reducing production costs on the one hand and creating incentives to buy Iranian steel by foreigners can cover this issue and ultimately benefit Iran Steel. Biden, on the other hand, is likely to refer to the environmental agreement from which Trump recently withdrew. This may not be good news for Chinese and American steelmakers. Usually, these agreements increase the cost of production for European and American companies and factories, and double the attractiveness of the Turkish and Iranian markets in the steel sector. For this reason, we will most likely see more promising growth in Iran’s steel production statistics next year.
*** Causes of growth in steel production in the past year
It seems that Iran’s steel industry has entered a new supply of its performance. On the one hand, advanced technologies in the production and processing of steel and self-sufficiency in steel electrode technology have made this industry safe from sanctions. On the other hand, due to the low cost of labor in Iran and the existence of rich iron ore mines and other mines in the field of energy such as oil and gas has caused the cost of steel production compared to other countries, even neighboring countries. This is an advantage that few countries have.
For example, a country like China has taken advantage of this opportunity and has become practically the largest producer and consumer of steel in the world, which has contributed significantly to the country’s economic growth this year. This year, all countries except China experienced negative economic growth, and China owes much of its success this year to its steel industry.
*** Evaluate the conditions of steel companies in the stock market
The stock record of steel and mining companies this year was more brilliant and more productive than last year. Mobarakeh Steel, Khuzestan Steel, Zobahan, Alloy Steel, Midco, National Steel Industrial Group, Kaveh South Steel, Khorasan Steel, Chadormelo, Arfa Steel, Bonab and Jahan Foolad in their reports published in Kadal system have announced an increase in capital due to increased profitability and sales, which in practice during the first six months of the year, these shares were very attractive to stock market activists. And we saw the formation of heavy shopping queues in these symbols. In September of this year, a total of 1,921,616 tons of steel ingots were produced by these companies, which is a 12% increase in productivity compared to the same month last year.
*** Performance of Khuzestan Steel in the past year
Sales of Khuzestan Steel Company during the first six months of 1399, is about 11,212 billion tomans, which compared to the same period last year (7,947 billion tomans) has grown by about 41%. Net profit of Fakhuz during the first six months of 99, about 3,381 Billion tomans, which compared to the same period last year (2.211 billion tomans) has enjoyed a growth of 52%. Also, Khuzestan Steel Company with a capital of 1.904 billion tomans has achieved a profit of 1,775 rials per share. The price of each share of National Iranian Copper Company on 30/07/99 is about 32,900 Rials.
*** Alloy steel production growth
Comparative performance data of the first 6 months of the year, for the last 5 periods of Iran Alloy Steel Company Sales of Steel Company Iranian alloy during the first 6 months of 1399, had about 2.406 billion tomans, which compared to the same period last year (1.364 billion tomans) has grown by about 76%. The net profit of Iran Alloy Steel Company during the first 6 months of 1399 was about 566 billion tomans, which compared to the same period last year (268 billion tomans) has grown by 112%. The profit margin of Iran Alloy Steel Company during the first 6 months of 1399 is about 24%.
*** Brilliant performance of Kaveh Steel in the past year
Kaveh Jonoob Steel Company also had a brilliant record in steel production last year and was able to obtain sales of 6.973 billion tomans during the first eight months of this year. Compared to the same period last year (3.413 billion tomans) has had a growth of about 104%. Also, the sales of this company in November of this year was about 1.452 billion Tomans, which compared to the same period last year (400 billion Tomans) has had a growth of 263%. Kaveh South Kish Steel Company had sales of about 5.186 billion Tomans in 1998.
Arfa Steel Company is one of the best this year and has experienced 82% growth. Although the company has made less profit than its other domestic competitors, it has tried to take advantage of innovative and technological approaches in steel production, which has led to the growth of the value of the company’s shares. The company’s sales in November this year were about 632 billion tomans, which compared to the same period last year (451 billion tomans) has grown by 40%. Arfa Iron and Steel Company had sales of about 3.404 billion Tomans in 1998.
*** Cheap pest of steel industry today
There is a threat to the growth of production and increase in sales of Iranian steel that must be addressed, and that is the phenomenon of cheap steel sales in export issues, which sometimes with the lowest possible profit margin, steel products are sent to international markets. The risk of shipping Iranian steel by the Americans has increased due to sanctions on the freight sector by the Americans, and rising costs have made Iranian steel transactions unofficial.
Therefore, the other side must keep part of the transaction costs with Iran, and this can only be achieved by selling cheaply. Iran should seize this opportunity to increase its sales to the highest possible level or create incentives for foreign traders who simply Do not end the reduction of prices and cheap sales of Iran.
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