Posted on 18 Jul 2023
Iranian cabinet ministers approved and announced last week an export duty increase for steelmaking raw materials and semis, implementing the duties retroactively from the start of the Iranian calendar on 21 March 2023.
The export duty for raw materials and semis was previously each at 0.5% and has now risen to 2% each for billet and slab, 5% for direct reduced iron, 20% for hematite and magnetite iron ore and concentrate, and 20% for pellet. Duties are also 1% on exports of billet and slab produced from scrap, and 80% on scrap exports.
"Last year, the Budget Law indicated the export duties of crude and semi-finished materials were determined at 0.5%, but now the ministers’ cabinet interpreted the associated article in the Budget Law and increased the export duties," explains a sector analyst. "From the day of announcement on 12 July back to the start of the Iranian year on 21 March, exporters will have legal issues opposing the decree to not pay [the duties]."
The new decree, which will significantly impact raw materials exports, has been welcomed by some mills.
"Finally, a good decision on the export duties,” opines a senior mill official. “As we don’t have the potential to produce nearly 40 million tonnes/year of slab and billet, it's wise to put these heavy duties on the upstream items so the industry can produce more yield and employ more workers.”
"This year has been better than last, despite electricity shortages and gas restrictions. Putting heavy duties on DRI, pellets, concentrate, and iron ore, we [Iranian mills] can achieve an output of 35m t/y, but only if the government doesn’t raise export duties on other items [semis and finished steel]."
Source:Kallanish
