Iranian steel production up 9.5% in H1 2012

Iran produced 7.37 million tonnes of crude steel in the first half of the year, up 9.5% on the same period in 2011, according to the World Steel Association.

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The production increase reflects the country’s drive to be self-sufficient for steel, particularly in the wake of sanctions that have made trade with other countries increasingly difficult.

Higher output levels, further plant expansions and new steel projects have driven this growth across the country, with iron ore production also increasing.

Mobarakeh Steel, Khouzestan Steel, Esfahan Steel and Khorasan Steel are just a few of the companies boosting output.

More than 20 mini-mills are under construction, according to the Iranian Steel Producers Association. Those projects have progressed physically at least 20-30% while some of them are close to being completed.

One market analyst said the country had the “highest potential advantages” for steel in the Middle East given its iron ore deposit of more than 4 billion tonnes, high reserves of oil and gas, developed infrastructure, access to sea in the north and south and an educated workforce.

He added that international sanctions could be a double-edged sword, since import restrictions spurred domestic development of the steel industries.

“For sure, the sanctions have slowed our progress. We could progress by a yearly rate [of] more than 20% if we had not been cornered by sanctions,” he said.

A handful of the new mini-mills – such as Pasargad Steel, Natanz Steel and Khazar Steel – with outputs between 550,000 and 1.5 million tpy – will be finished at the end of 2012, the analyst added, and could push Iran’s annual output growth to between 10-15% to produce about 17-18 million tpy by 2013.

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