Iran's steel production falls in Mar-Aug'21 on power outages

According to recent data released by the Iranian Steel Producers Association (ISPA), the country's steel production in the first five months of the current Persian year (Mar-Aug'21) recorded a noticeable fall compared to the same period last year.

The decline in production comes as steel mills were forced to lower electricity consumption amidst scorching summer and widespread blackouts.

• Iran produced 10.83 million tonnes (mn t) of semi-finished steel in the first five months of the current Persian year, down 12% y-o-y. Billets and blooms accounted for 6.50 mn t out of the total semi-finished steel output, a significant y-o-y decrease of 15% while slabs production was down by 9% y-o-y to 4.33 mn t.
  
  
• The total production of finished steel stood at 7.57 mn t in Mar'21-Aug'21, lower by 11% y-o-y as against 8.54 mn t seen in the corresponding period last year (CPLY).
  
  
• Production of long and flat products in the period under review stood at 4.29 mn t and 3.28 mn t, down by 7% and 17%, respectively.
  
  
• Re-bars and HRCs accounted for the largest share of finished longs and finished flats production with 3.52 mn t and 3.23 mn t, respectively. However, volumes of both re-bars and HRCs show a decrease of 7% and 15%, respectively as against the same period last year.
  
  
• According to ISPA data, Iran's production of direct reduced iron (DRI) stood at 12.36 mn t in Mar'21-Aug'21, down 4% y-o-y as compared to 12.88 mn t in the same period last year.
  
  

Thus, it seems that DRI exports from Iran may remain less impacted in the near term due to lesser impact on production levels as compared to billet/blooms which have fallen by 15%. Power outages have led to production curtailment which resulted in limited allocations for billet exports.