The change of Ministers brings hope to Iranian steel exporters

According to the metallurgical information network, Reza Rahmani, Iran's minister of industry, mining and trade, was removed, giving Iranian steel companies hope that the recently imposed export restrictions will be lifted. This week, Hossein Modares Khiabani replaced Rahmani as the new minister.

The Department previously issued an order saying that in order to reduce steel exports, steel companies can only export 25% of their production. The order also requires steel mills to sell 60% of their products to the domestic market through the Iranian commodity exchange. An Iranian steel producer said it was based on measures taken by rising domestic prices and that the mills were trying to get rid of the measures, which were unrealistic.

The ISPA pointed out that this was at a time when the domestic construction industry experienced a recession and the consumption of long materials fell as a result. In addition, Iran also announced plans to achieve an 11% year-on-year increase in crude steel production to 30 million tons in the year to March 20, 2021. This means that there may be more oversupply in the local market.

Despite this order, the department admitted that due to the impact of the new coronary pneumonia epidemic, long steel product consumption is expected to decline further this year. Due to weak demand in the construction industry, the apparent consumption of Iranian rebar fell by 2% to 6.1 million tons in the last Iranian year. Long steel product exports increased by 26% to 2.65 million tons. Exports of semi-finished steel products increased by 26% year-on-year to 6.91 million tons.

ISPA said that if steel exports are limited, not only will production not increase, but Iran's steel production is likely to decline for the first time in recent years.