Iranian Government Issues Fresh Guidelines to Restrict Steel Exports

Iranian Ministry of Mines and Mining industry has released fresh guidelines on the exports of rebar, and beams. According to the guidelines, the mills are obliged to serve at least 60% of their production (rebars, and beams) to the domestic market on Iran Mercantile Exchange (IME) and the export limit has been fixed to 25 percent.

While for the remaining 15 percent, mills can either sell it in the domestic market, or they can opt for exports. The Iranian custom is duty-bound to issue export licenses to the mills if they fulfill the domestic requirement. However, in the case of exports as a choice, the mills have to put a special request to the ministry. And depending upon the situation and case, the ministry will decide in which market (domestic or export) should the mill sell. SteelMint learned from market participants.

The export limitations are not new to Iran, this time government has released the stiffened version. However, the mills are protesting against this decision as they are facing challenges both internally and overseas due to the US sanctions and the pandemic, SteelMint learned from its sources.

The government has imposed these restrictions to stabilize domestic prices, which are strengthening at a good acceleration. With these measures, the government is expecting to have control over the prices.

Iran steel export scenario last year: According to the Iranian Steel Producers Association's report, during the last Iranian year; 21 Mar'19 - 19 Mar'20, Iran's steel exports stood at 10.36 MnT and booked a Y-o-Y rise of 22.21%. Exports of long steel amounted to 2.65 MnT, up 26% Y-o-Y. Billet and bloom exports were recorded at 4.83 MnT while that of the slab was at 2.07 MnT to register a Y-o-Y rise of 24% and 31% respectively.

Iran steel production scenario last year -According to the Iranian Steel Producers Association's latest report, Iranian steelmakers produced 47.42 MnT of semi-finished and finished steel products in the last Iranian year to register a 8.37% increase compared with the year before. As for finished steel, the output increased 6% Y-O-Y to 20.18 MnT. Long steel products had the major share of finished steel production with 10.22 MnT, up 6% Y-o-Y.

The country has also planned for capacity ramp-ups, so in such a scenario, it will be too early to predict the impact on exports, however, few trade sources are expecting export volumes to come down following this order.