Iran: DRI exports surge on power outages

The volume of sponge iron exports from Iran were at 415,000 tonnes (t) in the first four months of the current Persian Year, rising a whopping 569% when compared to the corresponding period last year (CPLY).

Power outages have lowered semi-finished and steel production in Iran following which mills have turned active in sponge iron exports, SteelMint understands.

Iran has been facing an unprecedented power crisis since the second week of Jul'21 in this scorching summer. However, some of the curbs brought on the steel mills have been eased. As per the new eased norms, the steel industry can carry on production on Mondays and Tuesdays from midnight till 8 am the next day operating at 50% of their total electricity consumption. However, for the balance period of the day and up to midnight, the mills can operate using only 10% of the power they actually require.

From Wednesdays to Sundays, the mills can continue with their production at all hours of the day and night but only drawing 50% of the total power they require from the grid.

The country has remained the second biggest DRI producer in the world, after its primary rival, India. Mobarakeh Steel Company, located in Isfahan province, is Iran's biggest producer of sponge iron. MSC is the biggest steel producer in Iran and the Middle East and North Africa region.

Price trends: A leading steel exporter from Iran has reportedly floated an export tender for 40,000 t of sponge iron. The shipment is likely to be scheduled for Sept'21.

According to SteelMint data, the previous sponge iron export tender from Iran had been concluded at $395/t FCA BIK Port towards end-Jul'21.