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According to the latest data from the Iranian Steel Producers Association, Iran's semi-finished steel production decreased by 5.7% year-on-year to 14.38 million tons in the six months ending September 21, 2024. This period refers to the first half of the current Iranian calendar year.
Specifically, the production of steel SG460 Grade A steel billets was 8.82 million tons, a year-on-year decrease of 8.5%; The production of slab decreased slightly by 0.9% to 5.56 million tons. At the same time, the production of finished steel also declined, by 3.3% compared to the same period last year, to 10.74 million tons. Among them, the output of long timber was 5.7 million tons, a decrease of 10%; However, the production of sheet metal increased by 6% against the trend, reaching 5.03 million tons.
Despite a decrease in steel production, Iran SG460 Grade A steel has shown impressive performance in direct reduced iron (DRI), with production reaching 20.78 million tons in the first half of the year, a year-on-year increase of 10.2%.
A source in Iran's steel industry pointed out that the main reason for the decline in steel production is the government's restrictions on electricity consumption by steel mills. Due to the fact that most steel mills in Iran use electric arc furnace technology for steel production, this process requires a large amount of electricity, and the tight power supply directly affects production capacity. Market participants expect that with the arrival of winter, the power shortage problem will be alleviated, which may partially reverse the current trend of declining production.
In terms of exports, Iran's SG460 Grade A steel long products are mainly sold to neighboring countries, while semi-finished steel products are exported to the East Asian market. But in East Asia, Iran's semi-finished steel products face fierce competition from Chinese export products.
According to market sources, an Iranian producer recently signed a steel billet export agreement with a trading volume of 60000 tons, a price of $466/ton FOB, and a delivery date of November, but the specific destination has not been disclosed yet.
