Posted on 15 Apr 2020
The imposition by Iran of a 10% duty on direct reduced iron exports gives the country’s semi-finished product exporters an unfair advantage over merchant DRI producers, according to Iranian Ghadir Iron & Steel managing director Asadollah Farshad.
Steel semis exporters can supply themselves with foreign currency, graphite electrodes and spare parts, while export duties on DRI, and iron ore pellet and concentrate are putting producers of these products under pressure, Farshad says.
“DRI, pellet and concentrate producers, just like semis producers, need currency to import spare parts and to implement their development projects, and they have foreign exchange expenditures,” Farshad says in a note on the Iranian Steel Producers’ Association website.
“In general, restricting exports in the face of oil sanctions is not the right thing to do,” the MD observes. Facilities should be provided to encourage exports, rather than duties implemented to restrict them, he adds. The loss of export market share as a result of the duty restricting shipments will be difficult to win back, he concludes.
In the 11 months through 19 February Iranian DRI exports grew 86% on-year to 942,000 tonnes, with consumption up 3% to 24.51 million tonnes and production up 5% to 25.45mt (see separate Kallanish article). This compared to ten-month growth of 76%, 6% and 8% respectively. This shows more DRI was exported in the February month as local consumption slowed.
Source:Kallanish
