Iran increased its output of crude steel by 9.2% year-on-year in the first half of the current Iranian year, which started on March 20.

Figures from the Iranian Mines & Mining Industries Development & Renovation Organisation (Imidro) show that the country produced 7.52 million tonnes of crude steel over the past six months.

This compares with 6.89 million tonnes produced in the March-August period in 2011, according to Imidro.

The World Steel Assn (Worldsteel) recorded growth of 9.3% in Iran’s crude steel production in the first eight months of 2012.

Iran will produce about 15 million tpy of crude steel if it can maintain these production volumes through the second half of the Iranian year.

Output from major steelmakers in the country includes Mobarakeh Steel with 5.4 million tpy, Esfahan Steel with 3.6 million tpy, Khouzestan Steel with 3.2 million tpy, Hormozgan Steel with 1.5 million tpy and Khorasan Steel with 700,000 tpy. 

A number of steel plants are under construction by both the Iranian government and the private sector, and will double or even triple Iran’s capacity if they come on stream in the next few years.

But shortage of financial resources and the effects of international trading sanctions on Iran have significantly slowed the progress of such projects.

“Considering the obstacles, we cannot expect to realise capacity of 30-35 million tpy in the next few years,” an economic consultant with one construction project said.

“Iran can sustain an annual growth rate of about 10% [for the production of crude steel], or even more, which is one of highest rates among steelmaking countries,” he added. “But we have to achieve annual growth of more than 20% if we intend to reach output of 30-35 million tpy in the next three or four years.”

It is now five years since the Iranian government began a programme of construction of eight provincial mini-mills, each with capacity of 800,000 tpy, another industrial analyst commented.

These projects are at the halfway stage, and will take a few more years to be completed, he added.

Such plants would normally be constructed within three or four years but, given the sanctions and the difficulty of finding investment finance, it would take Iran at least eight years, he concluded.

Sohrab Mehrabian 
smehrabian@steelfirst.com