Iran imposes steel export restrictions

Posted on 06 June 2018

Source: Kallanish

Iran has imposed a requirement for all steel exports to include a certificate of production origin. This is in order to better track shipments abroad and hold on to foreign currency earned on exports, Iranian steel market sources tell Kallanish.

Prior to the move some traders had been buying steel in the domestic market and exporting it using the unofficial, black market exchange rate. This puts the Iranian rial value per dollar at below that of the official, government-controlled exchanged rate, meaning product can be exported at more competitive prices, while still retaining a profit.

“It is a measure intended by the government to better track steel exports so that only genuine companies carry out exports who will return the foreign exchange to the central bank, rather than one-off paper companies which might disappear,” an Iranian mill source says. “I believe it might make exports a little less competitive as it effectively restricts the exchange rate gained by exporters to the official rate imposed by the government.”

There are suggestions that only producers can obtain the production certificate, meaning traders will no longer be able to export steel. “Government policy is returning export money through the central bank, so all exports need a certificate of origin that only producers can obtain… and exports will be under watch,” a second Iranian mill source comments. Another Iranian market observer adds: “Only producers are able to export – not traders.”

Some end-use industries have lauded the move, seeing it as a way to ensure Iran has sufficient steel supply to cover its domestic consumption.

In the Iranian year through 20 March 2018 Iran’s semi-finished product exports surged 84% on-year to 6.87 million tonnes, but finished steel exports fell -10% to 1.62mt.

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