• New steel mill to offset Russian halt to Iran sales

Iran’s opening of a new steel mill in central Isfahan last month will offset a cut in sales of hot-rolled (HR) steel coils in the face of looming unilateral US sanctions, officials say.

Steel traders, cited by Reuters, said Tuesday that Russian steelmakers Severstal and MMK as well as ArcelorMittal Temirtau, a Kazakh unit of the world’s largest steelmaker, were cutting back their sales to Iran.

Alex Agoureev, an adviser to ArcelorMittal Temirtau, said the company will suspend the export of hot-rolled coils to Iran due to the re-imposition of US sanctions.

“Supplies to Iran will be temporarily suspended due to the sanctions. Once sanctions are lifted, the supplies will be resumed,” he said.

Iran, however, was slashing imports even before US President Donald Trump’s announcement to impose new sanctions on the Islamic Republic.

Imports of hot-rolled coils from Russia and Kazakhstan constitute a small fraction of Iran’s consumption. Last year, the country used up 5.6 million tonnes of HT coils, of which 0.8 million tonnes were imported.

Severstal and MMK shipped 410,000 tonnes and ArcelorMittal Temirtau another 240,000 tonnes of HR coils less than 2mm thick which were not produced in Iran at a time.

HR coil is used in the pipes and profiles segment, which is a large steel end-use sector in the country.

Puneet Paliwal, a senior analyst with market intelligence group specializing in metals CRU, said that the cut in imports should not have a big effect on Iran.

Last month, Iran launched commercial production of HR coils, steel sheet and ribbed sheet at Mobarakeh Steel Company (MSC) in Isfahan, with a capacity of 1.6 million tonnes.

The new mill, built by Italian steel manufacturer Danieli with 220 million euros of investment, will substantially reduce import dependence of the country for the less than 2mm thick HR coil.

MSC officials have said the mill will ramp up production to completely substitute imports within a year.

According to Bahador Ahramian, a board member of the Iranian Steel Producers’ Association, a decline in Iran’s imports of HR coil was highly expected even before the US decision to re-impose sanctions because of the new MSC mill.  

He said the only area to watch for possible effect from the sanctions is Iran’s steel exports.

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Jul 18, 2018 12:29 UTC
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