Posted on 29 Apr 2020
The Iranian Steel Producers Association has warned of a decline in Iranian steel exports and foreign currency income on account of the Covid-19 pandemic and government restrictions on exports, Kallanish notes.
In a letter to Iranian industry, mine and trade minister Reza Rahmani, the association says Iran’s steel exports could range from $3.5-5 billion annually were it not for restrictions imposed by the ministry. The pandemic has heaped further pressure on Iranian steel exporters who are already required to obtain ministry permission to export.
The association has requested all restrictions on iron and steel exports be lifted immediately. It has also asked for the development of exports to be made the priority of Iran’s market regulation working group, and for export incentives to be introduced.
Iran’s steel exports surpassed 11 million tonnes in the Iranian year through 19 March 2020, generating income of $3.5 billion.
“If it were not for the regulatory and administrative restrictions of the market regulation authority and the ministry, the golden opportunity for the country's steel exports would not have been lost… and we may have now seen about $5 billion in steel exports,” the association says in the letter.
“Now, in the new year, when oil prices have reached their lowest level in six years and oil exports and oil derivatives have fallen sharply, the eyes of the people and officials are hoping for foreign exchange to enter the country,” the association continues. “In addition to sanctions, the corona crisis has exacerbated foreign restrictions on Iran's steel exports, and the country's domestic decision-making system is expected to understand and pay attention to these components, facilitate processes and remove restrictions on export development.”
Reduced exports pose a threat to Iran’s steel industry, moreover, considering the continued growth in production and stagnation in domestic industrial and construction activity, the association adds.
In the Iranian year through 19 March 2020 semi-finished product exports rose 26% on-year to 6.91mt, with finished steel exports up 16% to 3.46mt. This compared to 43% and 37% growth respectively after the six months through 22 September 2019. Annual finished steel apparent consumption was flat on-year, however, at 15.6mt. Crude steel production grew 10% to 27.2mt, with finished steel output up 6% to 20.2mt.
Source:Kallanish
