Iran, the world’s 10th largest producer of crude steel with a March-February output of 4.46 MnT and MENA’s largest steel producer and exporter has recently brought down the import duties on various types of flat steel, despite objections by producers and even government bodies such as Iranian Mines and Mining Industries Development and Renovation Organization.
According to Chilan Online, tariffs on HRC with a thickness of up to 4.75 mm and HRC wider than 1,850 mm have fallen by 5% to reach 10%. This is while duties on API flat products used in oil, gas and petrochemical industries have reduced from 15% to reach 10%.
Import duties for CRC with 0.5-1 mm thickness have reached 10% from the previous 20%. Duties on tin-plated flats less than 0.5 mm has been brought down to 15%. Tariffs on aluminum and zinc-plated flats have also dropped to 20%. Annealed and phosphated cold-drawn steel wires used in the production of bolts and nuts dropped to 15%.
All the figures are a sum of product-specific import duties and a 5% flat import tax levied on all goods imported into the country.
The final ratification of the reduced import tariffs shows that downstream flat steel users who accused suppliers of deliberately limiting supply and jacking up prices, have won the months-long battle over heavyweight producers such as Mobarakeh Steel Company.
The government had promised to cut down flat steel import tariffs since February 2017. The main winner will be Iran’s Syndicate of Steel Pipe and profile Manufacturers, which has championed private steel users cause for years now. Yet the new duties critics, such as Iran Steel Producers Association, maintain that lower import tariffs are unlikely to have the effect desired by the government and users, that is, lower flat steel prices in the local market.
“Our local prices are already lower than global ones and production capacities are left unused in mills. As it is, reduced duties will not affect domestic prices,” said Rasool Khalifeh-Soltan, the head of ISPA.
Deputy Industries Minister and head of IMIDRO, Mehdi Karbasian, expressed concerns regarding lower tariffs on March 14 and called on Industries Minister Mohammad Shariatmadari to reconsider the measure by setting up a “special council” for further deliberation.
Latest statistics by Iran Steel Producers Association show that imports of most steel products declined during the first 11 months of the previous fiscal year (March 21-Feb. 19). Semis imports dropped by 75% Y-o-Y to 47,000 MT. Billet and bloom imports dropped by 86% Y-o-Y to 25,000 MT. Slab imports, however, surged 633% Y-o-Y to 22,000 MT.
Imports of finished steel dropped 21% Y-o-Y to 2.07 MnT. The imports mostly included less than 3-mm thick HRC with 665,000 MY, down by 44% Y-o-Y, followed by HRC with 643,000 MT, up by 16% Y-o-Y.
Coated coil imports were noted to be around 370,000 MT, up by 21% Y-o-Y; HRC thicker than 3-mm imports was noted to be around 209,000 MT, down by 33% Y-o-Y. Other steel products import was 76,000 MT, down by 28% Y-o-Y.
Inputs taken from Financial Tribune and Chilan Online
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