Iran, one of the largest producer and exporter of steel in MENA and world has exported around 5.11 MnT of steel during first nine months of current Persian year (21 Mar-21 Dec’17), registered a growth of 26% Y-o-Y. The nation exported around 530,000 MT in the ninth month of current Persian year, registered a growth of 10% Y-o-Y.
According to Steelprice estimation, around 21.4 MnT of crude steel was produced in 2017 by Iranian steel companies, registered a growth 19% Y-o-Y. According to Mahmoud Eslamian, chairman of the Iranian Steel Producers’ Association (ISPA).the crude output would rise to above 30 MnT in the next Iranian fiscal year (to March 2019).
At the moment, production of semi-finished products is clearly more than the consumption, which is enabling producers to develop their overseas markets more. About 8.5 million MnT is expected to be exported in the current Iranian year, which will be 54% more than the previous year.
Following the re-election of Hassan Rouhani as Iranian president, the Industry, Mines & Trade Minister has announced that the government’s aim is for steel exports to reach 15 MnT/year during Iran’s sixth development plan (to 2021). The current export trend implies that this target is achievable.
In 2014, The Iranian strategic steel development plan was set to boost country’s steel production capacity to 55 MnT/year until 2025, a challenging target but probably possible.
Energy is the biggest plus point of Iranian steel industry
Due to huge resources of natural gas, about 85% of the Iranian steel industry’s capacity is based on a DRI/EAF configuration using gas. Esfahan Steel, the prime long producer is the only important steel mill implementing blast furnace and BOF.
The country’s nominal DRI capacity is about 30 MnT/year now, but it is expected to increase rapidly because some modules are still under construction, trial production or revamp work.
Iran recently started trial production using a domestic technology called PERED and two others projects are under construction. DRI capacity is planned to increase to 34.5 MnT/year by March 2018, mainly through PERED technology.
Due to the lower cost of this technology, Iran will speed up DRI and HBI development partly for export at the moment. Most of the country’s prime producers use HYL and Midrex technologies, but PERED has more advantages as compared to other processes because of the low initial investment and operation costs, plus it is more efficient.
Water Supply: the biggest challenge
Most of Iranian steel specialist believe that water supply is the main challenge for Iranian metal and mineral projects. Many of the country’s mineral reserves and the large steel mills are located in central provinces of the nation and are far from the sea.
To alleviate scarce supplies, a consortium of the country’s mining companies has begun building a water pipeline project to transfer desalinated water from the Gulf of Oman to the mining areas in Iran’s southern and central regions but it will increase the cost of production in future.
Inputs Taken from Mr. Reza Zaer (Iranian Steel Market Expert)
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