Iranian steel output grows 8% year-on-year in past seven months

Iran recorded growth in crude steel production in the past seven months of 8.1% year-on-year, underlining its position as one of the world’s fastest growing steelmakers despite international trading sanctions.

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The country produced 8.43 million tonnes, against 7.8 million tonnes in the corresponding period last year, according to new data from the World Steel Assn.

Industry sources predict that Iran’s output this year, at its current growth rate, will total 15 million tonnes – this would be 2 million tonnes more than last year.

“An annual growth rate of 8-10% is higher than most other world steelmakers, and a fair rate if we compare ourselves with other steelmaking countries,” a marketing manager at a state-owned mill said.

“But we require annual growth of more than 20% if we intend to realise an output target of 30 million tonnes of crude steel within the next four or five years,” he added.

Growth at this rate may be a struggle, however, as the country contends not only with trading sanctions but dwindling government financial resources.

The manager forecast growth no higher than 10%, which will lead to output of about 20 million tonnes by 2015.

“The sanctions have already seriously restricted the progress of our projects. We have money but we cannot transfer it to foreign sellers [of equipment and materials], and that is why our projects cannot progress normally,” he said.

“We can transfer small amounts via money exchangers or other intermediaries, but the problems arise once we try to transfer a few million US dollars,” he explained.

“However, it is obvious that a yearly growth rate of about 10% can be doubled if Iran can compromise with the USA and European countries over its nuclear project – although we cannot be too optimistic about this, at least in the near future,” he concluded.

But one economic consultant with a private steelmaker noted that a few privately funded mini-mills, such as those of Pasargad Steel and Khazar Steel, will come on stream in the next few months or early in 2013.

“The Iranian private sector has an output of about 1 million tpy of crude steel in total,” the consultant said. “We are optimistic that a capacity of a few million tonnes will be brought into operation in the current year and next year, considering plants in the final stages of construction.”

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