Posted on 19 Apr 2022
The Iranian Steel Producers’ Association (ISPA) has asked the industry, mines and trade ministry to revoke the export duties imposed on steel, given the country’s steel output is double its consumption, ISPA says on its online Chilan portal.
Iran's steel industry struggled with natural gas shortages and electricity supply restrictions in 2021, but managed to increase exports of steel products despite reduced production, Kallanish notes.
The Russian invasion of Ukraine has caused a vacuum in raw materials, and semi-finished and finished steel supply on a global scale, resulting in price hikes. However, the Iranian government's recent export duty implementation on steelmaking raw materials and steel products has undermined Iranian mills’ determination and efforts to fill this vacuum, ISPA says.
"The withdrawal of Russia and Ukraine from export markets has given Iranian steel producers an opportunity to fill the vacuum, while China and Turkey are relentlessly trying to replace Russia and Ukraine in supplying steel to global steel markets," ISPA says in a letter to the ministry.
ISPA stresses that steelmakers lost money when they had to suspend production during electricity supply curtailment last summer, and they would now have a chance to recoup the losses amid higher prices.
The association criticises the export duty as it says it contradicts high-ranking Iranian government officials’ previous statements that exports should be prioritised as the driving force behind Iran’s steel production growth. The decision has also negatively impacted financial markets, which see large participation from steel, mining and petrochemical companies.
Iran’s mining and trade ministry recently announced export duty tariffs on various products including steel, effective from 21 March until 21 June (see Kallanish passim).
Source:Kallanish
