Repeated recommendations of local steel producers over inability to meet downstream demand, finally Iran government has decided to cut import duty on flat steel by 50%.
Announcement of reduction in import duty has surely relieved Iran’s downstream steel producers who were reeling under pressure over under supply from domestic steel players and high export volumes.
Taking the advantage of the situation, major domestic steel players hiked domestic prices higher than exports.
Baffled by the situation, downstream producers wrote several letters to President and First Vice President requesting the Iranian government to prioritize domestic supply over under priced exports and reduce import duties.
Following this, Iran Trade Promotion Organization’s Article One Commission agreed to halve the current duties on flat steel imports to 10%.
As per reports, the commission, which comprises representatives of the ministries of industries, agriculture and economy, as well as those of the Central Bank of Iran and Iran Chamber of Commerce, Industries, Mining and Agriculture, also voiced its approval to reduce import tariffs on slabs to 5%.
At present, import duties are at 15% for semi-finished products and 26% for most long products, including I- and H-beams. Import duty on flat steel (excluding stainless steel) was earlier in the range of 20-26%, depending on the width has now been reduced to 10%.
Though the govt. is yet to announce from when onwards the duties will be applicable from. But market participants are taking it as a positive development from the govt.
Iran’s steel exports on an increasing trend – Iran’s major steel makers exported 4.12 MnT crude steel and steel products during Apr-Dec’16 registering 55% growth Y-o-Y, according to IMIDRO.
India has remained a major exporter of plates and GP/GC to Iran. In FY16, India exported 0.24 MnT flat steel to Iran out of which 0.18 MnT was plates.
Iran’s demand for flat steel products to increase further – According to World Steel Association, Iran’s crude steel production stood at 17.89 MnT in 2016, up 11% Y-o-Y. In 2015, Iran’s crude steel output stood at 16.15 MnT.
The Country’s demand for flat steel products is anticipated to rise further as a result of upcoming projects in oil, gas and petrochemical sectors.
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