Iran Perspectives in Focus

Metal ExpertIran Perspectives in Focus

December 2015

Nuclear deal to breathe new life into Iran’s steel export

Khouzestan Steel’s billet export potential yet to be unleashed

Mobarakeh Steel: exports the only way out of recession in Iran

IGISCO: EAF producers should become more aware of DRI use

• Iran’s exporters• Square billet buyers in Turkey

and MENA• Prospecti ve exporters of high

added value products to Iran• Iranian end-user’s representati ves• Equipment manufactures• Traders• Analysts

WHO SHOULD ATTEND?

25 May, 2016, Tehran, Iran

3RD Iran Steel Perspecti ves Conference

Metal Expert Conferences

Market Opportuniti es

The removal of sancti ons will open up new opportuniti es for local steel exporters, especiallyfrom the private sector, as well as numerous consumers in neighboring countries. Simultaneously, opening economy is goingto revitalize Iran’s domesti c consumpti on of high value added products such as thin fl at steel and coated products, tubes and pipes, plates and others.

MARKET OPPORTUNITY

• Prospects of substi tuti ng scrap with Iranian billet in Turkey

• Iran’s square billet shipments to GCC instead of the material from CIS and China

• Prospects of sheet and coated steel importto Iran

• Modernizati on of Iran’s oil and gas sector – a new opportunity for tubes and pipe suppliers

• Prospects of plate imports for shipbuilding• New technologies and equipment for Iran’s

steel downstreamPreliminary Programme on our web site >>

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Iran Perspectives in Focus | December 2015 | 3Metal Expert

Market overviewLeading steelmakers keep operation rate high despite tough market 27

Iran likely to meet export targets for current year 28

Tehran strengthens cooperation with Asia in mining and steel sectors 29

Crude steel production expected at 18 million t in Iran 30

Steel exports to double this year 31

Turkey – Iran free trade zone to boost steel trade between countries 31

Turkey’s plan to raise exports to Iran doubtful, prospects for imports look better 32

Contents

top CoMpaniesKhouzestan Steel’s billet export potential yet to be unleashed 11

Availability of natural gas and iron ore resources together with the predominant use of DRI-based steelmaking technology makes billet production in Iran extremely profitable.

Mobarakeh Steel: exports the only way out of recession in Iran 14

Despite the approaching removal of sanctions the Iranian domestic steel market still leaves much to be desired.

Esfahan Steel reveals threats and opportunities of Iranian longs market 17

Considering toughening market conditions both inside the country and in the global market, Iran’s largest longs producer Esfahan Steel Company (ESCO) is looking for the ways to increase its competitiveness and improve financial position. During Metal Expert’s Iran Steel Perspectives Conference, which took place in Istanbul, Nematollah Mohseni, ESCO’s Deputy Managing Director in Sales and Marketing revealed challenges of the modern domestic and global markets and told about the company’s policy in these conditions.

interviewIGISCO:

EAF producers should become more aware of DRI use 20

Today Iran is the second largest DRI producer in the world. However, being extremely rich in natural resources, after removal of sanctions it has potential to become the leader of the segment and cover the needs of both local and foreign customers.

featuredSteel projects in Iran remain postponed as sanctions to be removed from January 2016 7

Despite the US Senate‘s vote to lift sanctions, it is now clear that the removal of economic restrictions against Iran will start not earlier than the beginning of 2016. Therefore, many projects, in steel sector in particular, are now being postponed until the improvement of financial environment in the country.

iran in figures

eventIran Steel Export Perspectives Conference:

Promising future in challenging market 24

iranian MiningIran plans $29 billion investment in mining and steel in dustry to ba lance production chain 33

Yazd Rolling Mill to strengthen positions in raw materials market 34

MIDHCO expands despite tough economic conditions 35

Iran may stop iron ore exports starting from March 2016 36

India’s KIOCL to partially cover Iran’s pellet need 37

Neyriz Ghadir Steel Company to supply local market with DRI by end‑2016 38

4 | Iran Perspectives in Focus | December 2015 Metal Expert

editorial

Over the period of the international blockade, Iran’s steel market has steeply contracted as the economy ran out of necessary investments. As a result, not all local steelmakers positioned themselves for a steady expansion, as capacity utilization at some private mills was less than 40%. The only bright spot was growing steel exports at the state-owned steel giants, like Mobarakeh Steel Company and Khouzestan Steel Company, and, to some extent, the implementation of several mining and DRI-projects by the IMIDRO members. But those days are almost gone!

The approaching removal of sanctions will, first of all, open up new opportunities for Iran’s exporters, especially from the private sector. The country is likely to meet the export targets set for the current Iranian year (4 million t), as in the first 6 months it sold 1.8 million t. Iran set a goal to export around 10 million t of steel products for the long-term perspective. In fact, local producers are already busy trying to meet the needs of the foreign customers by increasing production capacities, diversifying production portfolio and introducing competitive prices, which means Iran’s export potential is yet to be unleashed.

A huge stimulus of opening economy is going, though not immediately, to revitalize domestic consumption in Iran for different kinds of steel goods, from rebar to rails, flat products and pipes. The economic freedom will gradually let unfreeze construction and infrastructure development projects, expand oil and gas pipelines, automotive sector and shipbuilding.

Metal Expert has great pleasure to present its special review with a focus on Iranian market and one of today’s most topical segments – export. In this publication, Metal Expert is trying to evaluate the current situation and the perspectives of the Iranian companies in international steel market. It contains analysis on Iran’s export potential, featured materials about major steel producers and exporters, interview with Iran Ghadir Iron and Steel Company (IGISCO) and other important and interesting information, which, hopefully, may help you in your business.

Enjoy your reading!Andrey Pupchenko

Deputy Managing DirectorMetal Expert

Iran ready for new opportunities


Nuclear deal to breathe new life into Iran’s steel exportA 12-year stand-off between Iran and the West seems to come to an end as the parties have finally worked out a draft nuclear agreement. Yet, some issues are yet to be resolved for the agreement to come into effect. The deal is crucial for Iran as a return to the international arena will breathe a new life into the country’s economy, steel sector in particular.

Under the agreement, official Tehran is to cut its uranium enrichment capacities by 70% and to utilize its stored reserves by end-2015 in exchange for gradual relief from sanctions. The sticking point now is in Iran’s decision whether to provide UN inspectors the access to all suspect sites or not. The next step on the way for sanctions removal will be final agreement and UN Security Council resolution adoption. However, if the deal is violated, a “snapback” mechanism will work and part of sanctions will regain power in 65 days.

In the steel segment, exporters will be the first to feel the improvement already by the

end of 2015. The reason is that international money transfer problem, one of the major obstacles for successful trade, will be solved soon. For now, only big mills, mostly state-owned, have a possibility to sell goods abroad. In particular, 90% of this year’s export target of 4 million t will be covered by Mobarakeh Steel (50%) and Khouzestan Steel (40%). However, as Iran’s banking system starts to join SWIFT, new steel exporters may enter the market. In July, one of Iranian private banks – Day Bank – was the first to come back.

A thaw in relations between Iran and international community will support the

featured


featured

inflow of investments to national economy starting from the next year, particularly in construction, one of the major steel

consumers. “The problem of Iranian market is the lack of financing in consuming industries. Only when it is solved steel market will get balanced in terms of supply and prices. We will see the first changes

no sooner than the end of this year, when the real result will show up by mid- or end-2016,” a market insider told Metal Expert. Growing demand will spur local steel production, which is now underloaded. According to Metal Expert’s data, Iran’s current total long steel capacities account for around 19 million t, with some mills running at less than 50%.

In a long-term prospect, market participants do not rule out a rise in steel imports, but “the suppliers will more probably be targeting the segments that are not so developed in Iran, such as merchant bars, sections and rails.”

� The problem of IranIan markeT Is The lack of fInancIng In consumIng IndusTrIes


featured

Steel projects in Iran remain postponed as sanctions to be removed from January 2016Despite the US Senate’s vote to lift sanctions, it is now clear that the removal of economic restrictions against Iran will start not earlier than the beginning of 2016. Therefore, many projects, in steel sector in particular, are now being postponed until the improvement of financial environment in the country. Nevertheless, Iranian mining and steel companies continue to prepare the ground for the investments by conducting feasibility studies and researching the market to diversify the future economy.

In September Senate Democrats supported President Obama and preserved the deal he and international leaders struck to curtail Iran’s nuclear program. With the green light from the US side, the nuclear monitoring process necessary for sanctions cut will probably be in place by January or February 2016, according to International Atomic Energy Agency (IAEA) envoys, which means restrictions will last until March. Information that Iran does not

give IAEA investigators enough access to Iranian facilities was dismissed. “There is no particular concern that the IAEA will not be able to complete a final assessment on

� Iran had Turned To The easT due To sancTIons, now opporTunITIes are openIng up wITh The wesT


featured

time,” IAEA Director-General Yukiya Amano commented to Bloomberg.

Sanctions removal will open the door for the inflow of long-awaited foreign investments as Iranian banks do not have capacity or liquidity to finance the projects.

During the last four years of sanctions, Iranian banks could not use international financial transaction systems. They were mainly confined to retail banking, and their balance sheets deteriorated despite liquidity injections from the government. “There are lots of projects but no money, so they are looking for overseas sources,” said Mehrdad Parhizkar, a partner at Dubai-based consulting company Frontier Partners, in his interview with MEED. However, according to market insiders, it may take a year before large multinational banks from Europe move to the Iranian market as they had to pay heavy fines for sanctions violations. This means Iran will continue to look for support from Asian banks that are less restricted by American institutions. “Because of sanctions, Iran had turned to the East. Now that opportunities are opening up with the West, Iran is unlikely to turn its back on old friends,” added Mr. Parhizkar.

Iranian mining and steel companies are waiting for the inflow of foreign investments like no other as this sector is expected to diversify oil-based economy of the country. “Oil is a highway for Iran’s economy. However, since its price is falling dramatically we need a sideway, which is steel. But to achieve that Iran needs investments for the industry development,” Asadollah Farshad, Managing Director of Iran Ghadir Iron and Steel Comapny (IGISCO), commented to Metal Expert. For this reason many steel projects that are not of urgent need in Iran are being postponed for 2016-2017. “Many mills postpone expansion plans dedicated to finished steel, they focus on raw materials processing projects to balance their production chain and be competitive,” one local producer said.

� oIl Is a hIghway for Iran. we need a sIdeway, whIch Is sTeel


featured

Sanctions removal promises bright future for Iran’s line pipe and OCTG segmentsToday, as the USA and the EU finally approved conditional waivers, Iran is close to sanctions removal and economic recovery as never before. Iran, which has one of the world’s largest natural gas and oil resources, will increase oil-and-gas production and strengthen its position in the global market, as soon as it is liberated from the pressure of international blockade. The expansion plans in the sector will promote both welded and seamless pipe consumption in the country, which shrank significantly over the years of the economic blockade.

In the pre-sanctions period, Iran’s large diameter pipe consumption was above 1 million tpy, of which a significant volume was produced domestically, mainly by Ahwaz Pipe Mills, Sadid Industrial Group

� The esTImaTed pIpes consumpTIon for lInepIpe projecTs Is around 3 mIllIon T


featured

and Safa Industrial Group. A total large diameter pipe (20-120” OD) production capacity of those mills is around 2.5 million tpy. Import was also an important part of this market. According to Metal Expert data, in 2010 welded pipe import amounted to around 532,000 t, while in 2013 it dropped to just 165,000 t and to less than 50,000 t in 2014. Among major foreign suppliers were China, India, France and Germany.

Holding around 34 trillion cu m natural gas reserves and planning to double the annual production to 400 billion cu m per year by 2020, Iran has a lot to do to expand and renovate the pipeline. Iran Gas Trunkline (IGAT), a series of 11 large diameter pipelines transferring natural gas inside and outside the country, is the core of the country’s gas pipeline network. Today, Iran has 36,000 km of high-pressure gas transmission lines and 264,000 km of distribution network lines, while 4 projects (IGAT 6, 7, 9 and 11) are underway. According to National Iranian Gas Company (NIGC) assessment, when they are completed (by 2020), high-pressure transmission lines length will reach 41,000 km. The estimated pipes consumption for those projects is around 3 million t. This means Iran has great potential for the growth of domestic and import line pipe demand. Former suppliers of pipes are expected to come back to Iran as early as end-2016. “Sanctions cut is to stimulate oil and gas sector projects as well as to remove banking problems. If the market situation follows this scenario we will come back to business in Iran on a pre-sanctions level,” commented ChelPipe Group press secretary.

The future of Iranian OCTG segment is bright as well. The country’s oil reserve

is estimated at 158 billion barrels and Iran expects to use this benefit despite the global oil market crisis. Iran currently produces 2.8 million barrels per day, with 50% of this volume meant for export. As soon as international sanctions are removed together with a ban to export more than 1.5 million bpd, Iran is ready to increase production by at least 500,000 bpd within the next six to twelve months. In a long term perspective Iran expects to raise the output by 1 million bpd, the local media report. Recovery of the drilling activity will lead to increased OCTG consumption. The first positive results will be seen by 2017.

However, unlike in case of the line pipe, OCTG segment will be more dependent on import. Currently, Iran has few OCTG producers – Iran National Iron and Steel Group (INSIG) and Luleh Gostar Esfarayen Company – with a total capacity of around 200,000 tpy, while projects at other mills are either postponed or in the stage of development. Traditionally, China has been the major OCTG supplier to Iran. According to Metal Expert data, over the years of sanctions import has been around 300,000 tpy on average. In 2013, however, this figure dropped to 200,000 t but in 2014 it recovered to the usual level. Considering the prospects of 1 million bpd oil production increase in a mid-term, Iran may increase OCTG import to more than 450,000 t. “We will obviously be there to work with them,” a source from France’s Vallourec said.

� Iran may Increase ocTg ImporT To more Than 450,000 T


top CoMpanies

Khouzestan Steel’s billet export potential yet to be unleashedAvailability of natural gas and iron ore resources together with the predominant use of DRI-based steelmaking technology makes billet production in Iran extremely profitable. Thus, over the years of sanctions the country developed and continues to work over semis capacities ample to cover not only the needs of the local market, but also to turn into one of the Middle East’s biggest suppliers.

Today, despite international sanctions still being in place, Iran is already strengthening its position in billet export market, in particular in the region. Currently, the major supplier is Khouzestan Steel Company (KSC), which targets to export 1.5 million t of semis in 2015. What makes billet segment attractive for Iran is competitive production cost even compared to Chinese mills, which are still offering the lowest prices. According to Metal Expert assessments, it stands at the level of around $174/t, considering $33/t iron ore price and

availability of DRI module, like in case of KSC. To compare, BOF-based billet production cost in China at $39/t the price of charge was assessed as $240/t for December.

� cosT of bIlleT producTIon In Iran Is compeTITIve even compared To chInese mIlls


top CoMpanies

Iran’s current capability to produce billet stands at around 15 million t, while longs-making capacity – at almost 19 million t. According to market player’s assessments, in 2014 general capacity utilization rate of longs rolling mills in Iran did not exceed 45%. Consequently, under idled billet-making capacities Iran hides at least 4.5 million t export potential for the moment.

However, not all the mills will be able to realize it successfully due to geographical

position inside the country, as most of them are situated closer to the north and center.

Nevertheless, Iran has vast expansion plans in the segment of billet. New projects are predominantly situated closer to the southern border of the country in Kerman, Fars and Khouzestan provinces. “The development of the South of Iran means it will be more export-oriented, while old mills will be mostly covering the needs of the local market,” Iranian producer commented to Metal Expert. This means that the real export potential of Iran is yet to be unlocked.

In 2015-2017 the country is planning to add 13.2 million t of billet and around 3 million t of longs-rolling capacities. Taking into account the lack of financing and long period for project implementation Iran

� Iran’s poTenTIal for bIlleT exporT Is around 3 mIllIon T over 2016-2017

� bIlleT producTIon cosTs, exw

174 180

236 240258 261

292309

0

50

100

150

200

250

300

350

Iranian from local iron ore/DRI (at

$33/t)

Russian from local iron ore/DRI

(at $29/t)

Ukrainian from local iron

ore/BOF (at $17/t)

Chinese from iron ore/BOF (at

$39/t)

UAE from iron ore/DRI ($78/t)

Iranian from local DRI (at $123/t)

Turkish from USA scrap (at $195/t)

Iranian from scrap (at $160/t)

$/t


top CoMpanies

is unlikely to commission all above mentioned mills. Despite this the country’s potential for billet export is still impressive – around 3 million t over 2016-2017, according to Metal Expert assessment.

Yet, the success of Iran in the global market will depend on its ability to adapt to the pace of price movement and needs of the customers. “Iran

has promising future as an exporter, however, over the years of international blockade it lost the pulse of the world market. It does not refer to the quality of the products, but ability to work in fast-changing environment with high level of competition,” a Turkish producer said during the 2nd Iran Steel Perspectives Conference in Istanbul held by Metal Expert.


top CoMpanies


top CoMpanies

Mobarakeh Steel: exports the only way out of recession in IranDespite the approaching removal of sanctions the Iranian domestic steel market still leaves much to be desired. For this reason Iran’s largest flat steel producer Mobarakeh Steel Company (MSC) is now trying to expand the share of exports, especially in Europe, and diversifies its product portfolio according to the needs of the market.

Economic downturn and lack of investments over the years of sanctions have significantly influenced steel consumption in Iran. Automotive industry seems to be one of the few that started to revive, while construction, HVAC and pipe segments remain weak. In these conditions local producers seek for opportunities in the foreign outlets. “Increasing exports is the only way out of recession,” former CEO of MSC Mahmoud Eslamia commented to local press. This Iranian year (March 21, 2015 – March 20, 2016) the company

targets 2 million t exports, a 35% rise y-o-y. Out of the planned volume around 80% will be represented by HRC, while remaining 20% – by CRC, HDG and PPGI.

In the geography of sales around 60% will be destined for Europe, mainly for commercial and automotive sector. To meet the needs of the market MSC, a traditional producer of 2.3-16 mm HRC, enlarged its flats range. Recently the company started productions of ultra-tensile steel sheets DD14 3 to 4 mm thick and 1,270 to 1,515 mm wide.


top CoMpanies

First batches have already been sent to European customers. “This special product can be applied for manufacturing cold-rolled coils (IF grade) and galvanized tensile grades used specially for automobile bodies,” company officials said. For the commercial segment, in July the producer also opened up thin coil production within unprecedented dimensions 1.8x1,200, 2x1,350 and 2x1,450, Metal Expert reported earlier. “MSC has always been active in EU but now with a completion of basket it can have better chances,” the company representative told Metal Expert.

The remaining 40% of export shipments will be made to the Middle East and Asia,

where the producer, supported by growing demand from pipe and HVAC segment, will be able to find the market. Demand for the conditioning systems in the MENA region is expected to add 5.4% annually until 2018 reaching $6.17 billion in money terms, local publication Trade Arabia reports. As for pipe consumption in the region, Iran only has around 7,000 km projects to be built in 2015-2016.

Over the first seven months of 2015 MSC produced 45% of Iran’s steel output – 4.3 million t. Up to 25% of this volume was exported. “I believe we are working according to the schedule,” the MSC representative added.


top CoMpanies

Esfahan Steel reveals threats and opportunities of Iranian longs marketConsidering toughening market conditions both inside the country and in the global market, Iran’s largest longs producer Esfahan Steel Company (ESCO) is looking for the ways to increase its competitiveness and improve financial position. During Metal Expert’s Iran Steel Perspectives Conference, which took place in Istanbul, Nematollah Mohseni, ESCO’s Deputy Managing Director in Sales and Marketing revealed challenges of the modern domestic and global markets and told about the company’s policy in these conditions.

Iran is ranked as one of the largest longs producers in the Middle East – around 55% of the region’s output.


top CoMpanies

According to ESCO report, in 2014 Iran produced 8.3 million t of longs. Since ESCO sells more than 85% of its output to domestic customers, local threats remain major concern for the company. With

2.7 million tpy longs making capacity last year ESCO’s held 58% of domestic beam market and 13% of rebar market. “Last year

ESCO increased its share of beam and rebar market by 3% and 2%, respectively. However, excess capacities and cheap import slow down further growth,” said Nematollah Mohseni. According to Metal Expert’s data, around 1 million tpy of longs making capacities will be added in 2016-2017 in Iran while utilization of

most existing mills does not exceed 50%. In addition, the producer emphasized such domestic and global challenges as economic recession and continuous decrease in oil prices, lower housing construction and reduction of steel price.

Thus, ESCO builds its development strategy based on existing opportunities. As Iran plans to extend its railway network from 13,000 km to 25,000 km by 2025 ESCO

is diversifying its product portfolio and entering more profitable niche segments like rail production. The company will upgrade its operating rail and beam mill (700,000 t) and build a new one (1 million tpy), which will allow it to focus on high value-added products. Besides that, the producer eyes to make use of sanctions removal. “The lift of sanctions means improved domestic consumption from construction sector and infrastructure development segments (ports, railroads, pipelines) as well as ease of export operations,” added Mr. Mohseni.

Last Iranian year (ended March 20, 2015) ESCO produced 2.7 million t of steel setting a record and reaching 100% capacity utilization of rolling mills, according to company officials.

� Iran produces around 55% of longs In The mIddle easT

� The lIfT of sancTIons wIll Improve domesTIc consumpTIon and ease exporT operaTIons


top CoMpanies


interview

IGISCO:

EAF producers should become more aware of DRI useToday Iran is the second largest DRI producer in the world. However, being extremely rich in natural resources, after removal of sanctions it has potential to become the leader of the segment and cover the needs of both local and foreign customers.

At Iran Steel Perspectives Conference held in Istanbul, Metal Expert met Asadollah Farshad, Managing Director of Iran Ghadir Iron and Steel Company (IGISCO), who told us about the prospects of the country as a DRI producer.

could you, please, say more about the company’s performance, raw materials sources and customers?

IGISCO was founded in 2006 in Ardakan city, Yazd province. In 2007 we started to establish MIDREX plant to produce DRI. The production itself started in 2011 with the capacity of 800,000 t.

We get iron ore pellet from Chadormalu Mining and Industrial Company (CMIC). It is close to our company and it is also one of our main shareholders. For this reason we are not in hard condition with raw materials.

The main customers in Yazd are Iran Alloy Steel Company (IASCO) and Yazd Rolling Mill. Most of our clients are from private sector mainly with EAF technology, but there are also some smaller producers with induction furnace technology. Also we are selling products to Khouzestan Steel Company (KSC), Mobarakeh Steel Company (MSC), Iran National Steel Industrial Group (INSIG) and other steel producers in Iran and abroad.


interview

what makes drI production in Iran so profitable?

The answer is good natural gas basis. If you look at the world DRI production, which in 2014 was about 75 million t, you will see that the main share belongs to the MENA, where natural gas resources are ample.

However, India, the number one world DRI producer, is not based on gas availability, but coal. Out of last year’s Indian DRI output of 17 million t, more than 65% was produced

on coal basis. But they are using low quality coal. Thus, with availability of high quality natural resources Iran will become the first world DRI producer.

how does the Iranian drI market work? what is the share of producers that supply drI to the free market and what is the share of those who produce it for their own needs?

I suppose every big producer like MSC and KSC is producing from pellet. This means the chain of their production is balanced. The remaining steelmakers mostly do not have pelletizing plants. For this reason they need some quantity of DRI when their MIDREX capacities are on maintenance. Then they

buy from us. All the private sector has no DRI plants, for this reason they need us.

Now Iran has capacity to produce 17.5 million t of DRI, I would say around 3 million t from this volume is for the free market, which is 20%.

and how will the Iranian drI market be developing in your opinion?

In 2025 we will have capacity to produce 50 million t of DRI. It means if we produce 50 million t of steel we have sufficient raw material. But if our steel capacity is less than this figure we will be able to export. If you look at the world trend for raw materials most of the producers use scrap, however its resources are quite limited. For this reason steel producers should think and plan to prepare raw material for the future. Now global DRI use in EAF production is around 18%. It means remaining 80% is fed with scrap and pig iron. EAF producers should become more aware of DRI use, especially for high quality steel.

� Iran wIll become The fIrsT world drI producer


interview

Iran’s major problem now is the lack of pellets. and as you said drI production will be growing. how will the issue of pellets lack be solved?

There are many projects for pellets production now. Because of sanctions we had some difficulties in investment. I suppose with their removal many investors will look for the activity here. The highway of economy in Iran is oil industry

now. We need a sideway which is mining.

If we have sufficient capital we have capability to increase our capacity for iron ore pellet even to 100 million t, they can be converted into 70 million t of DRI.

so this means Iran will have significant drI export in the future? It is forecast that Turkey can be a possible buyer. what do you think could be other destinations?

The free volumes can be exported to the Middle East, North Africa, Turkey, and Azerbaijan. But do you know the exact meaning of this capability? The DRI we will export is equal to energy. It means we will also be exporting natural gas. Look and think about the main issue of the

scenario I told you. Here you have iron ore concentrate. To change it into pellet you need natural gas, at least 30 m cu/t. Then you want to produce DRI which needs 280 m cu of gas to produce 1 t. It means when I export 1 t of DRI to Turkey I also export 310 m cu of natural gas.

In this regard does IgIsco have any expansion projects?

As a 25% shareholder of Golgohar Mining & Industrial Company we are investing to establish two 1.7 million t mega DRI-modules at Sirjan, Kerman province.

The first module will come in operation this September. And the second one will be commissioned next year.

To sum up our conversation, do you believe that after sanctions removal the international raw materials market will have more influence on Iran? what can be the effect of it?

I suppose sanctions removal will open new opportunities for the steel market. I’m sure we will face some advantage for export. However, we should work hard

on the economical function: increase our productivity, optimize production cost, labor and energy cost to be competitive in the global market.


АктуАльно

0,0

3,0

6,0

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12,0

15,0

18,0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0,0

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6,0

9,0

12,0

15,0

18,0

21,0

2008 2009 2010 2011 2012 2013 2014

0,0

3,0

6,0

9,0

12,0

15,0

2007 2008 2009 2010 2011 2012 2013 2014

45%

21%

14%

4%

2%1%

13%

Mobarakeh Steel Company(incl. subsidiaries)

Khouzestan Steel Company

Esfahan Steel Company

Khorasan Steel Company

Iran Alloy Steel Company

Iran National Steel Industrial Group (INSIG)

Others

750;40%

700; 8%

400;22%

Mobarakeh Steel Company



� sTeel exporT by companes In h1, currenT IranIan year thousand t, %

� crude sTeel ouTpuT by major producers In h1, currenT IranIan year %

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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12,0

15,0

18,0

21,0

2008 2009 2010 2011 2012 2013 2014

0,0

3,0

6,0

9,0

12,0

15,0

2007 2008 2009 2010 2011 2012 2013 2014

45%

21%

14%

4%

2%1%

13%







Others

750;40%

700; 8%

400;22%




iran in figures

�crude sTeel producTIon million t

�drI producTIon million t

�apparenT sTeel use million t of finished steel

0,0

3,0

6,0

9,0

12,0

15,0

18,0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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9,0

12,0

15,0

18,0

21,0

2008 2009 2010 2011 2012 2013 2014

0,0

3,0

6,0

9,0

12,0

15,0

2007 2008 2009 2010 2011 2012 2013 2014

45%

21%

14%

4%

2%1%

13%







Others

750;40%

700; 8%

400;22%





Iran Steel Export Perspectives Conference:

Promising future in challenging market

The agreement for sanctions removal, signed in June 2015 heated the interest of global steel market participants to Iran and gathered them at Iran Steel Export Perspectives Conference in Istanbul on September 4, 2015. Steel and raw materials market participants flowed together to discuss the future of Iranian industry and its problems.

Attendees were Iranian, the UAE, the CIS, European and Chinese representatives, which have become traditional counterparts over the past several years, as well as Turkish ones, that are eager to resume cooperation with this destination. The scope of the event covered the most pressing issues of Iranian steel market such as local and export market perspectives, existing and needed technologies as well

as cooperation in the region. Among the speakers were such majors as Khouzestan Steel Company, Esfahan Steel Company, Colakoglu Meatlurji and Yolbulan Bastug Metalurji. Metal Expert also presented its vision of Iran steel export perspectives and competitiveness in the Middle East.

The main concern for Iranian producers remains weak local market sentiment, caused by consuming industries crisis, which makes them look for the ways out of recession. One of them is increased export volumes. This Iranian year, the country plans to double the volume of shipments to

event


event

the foreign outlets, to 4 million t, which will be mainly represented by semis and HRC. Another problem is global descending price trend and cheap import material, mainly from China, that harms local producers, despite duties raised since the beginning of the year (March 20, 2015).

Another part of the conference covered the issues of technologies and machinery. Since in pre-sanctions period Iran was mainly targeted at re-rolling and thus dependant on import semis, after the implementation of international blockade it started to work over the expansion of its own steelmaking capacities. Having succeeded at this, Iran, however, now lacks capacities to produce agglomerated iron ore and DRI and is actively working over

balancing the production line, waiting for the sanctions removal. Besides that, many existing mills now need to be upgraded to meet the needs of the global market.

The event was summed up by the speech of Turkish delegates expressing readiness to renew cooperation with Iranian side after sanctions removal. Turkish representatives now see Iran not only as a customer but also as a potential supplier, in particular in the segment of semis. However, Turkish side noted that “Iran has promising future as an exporter but over the years of international blockade it lost the pulse of the world market. It does not refer to the quality of the products, but ability to work in fast-changing environment with high level of competition.”


event

� speakers and TopIcs:

mete sahinLong Products Sales Managercolakoglu metalurji as

Basic figures of Turkish steel industry and recent changes due to semi-finished products international markets

nematollah mohseniDeputy Managing Director in Sales & Marketingesfahan steel company

Iranian Long Steel Market, Opportunities and Threat

asadollah farshadManaging DirectorIranian ghadir Iron and steel co (IgIsco)

World DRI Current Situation: Production, Demand, Trade and Export

mehmet cakmurSales Directormmk metalurji

Turkish Flats market and possible opportunities when Iran comes back to steel market

pavel vorobevCorporate strategy departmentseverstal

Major trends for the future development of the global steel industry

andrey pupchenkoDeputy Managing Directormetal expert

Iran steel export: perspectives and competitiveness in the MENA region

emrah ugursalForeign Trade Manageryolbulan bastug metalurji

Overlook of Turkish steel industry and position in the Middle East: comparison of the position of Turkey with that of Iran in the region

Iraj salehiChairman & Technical Directorbarsoo engineering company

Iran's Steel Development facts & Investment Promoting Projects

andrea diasparroVice Presidentdanieli

Danieli MicroMill – The winning choice in Capex & Opex to produce Bars and Wire Rod from Scrap

mehran abbas ZadehStrategic Planning Managerkhouzestan steel company

Export of Billet from Iran to MENA market

johann kriechmairSenior Consultanthorst wiesinger consulting gmbh

The Iranian steel industry: Needs to take the right track for development


Market overview

Leading steelmakers keep operation rate high despite tough marketDespite tough market conditions caused by economic and political instability in the county, Iranian leading steelmakers supported by the government manage to keep their capacity utilization rates relatively high.

Over H1 of the current Iranian year (March 21, 2015 – September 22, 2015) total volume of crude steel produced in the country amounted to 8.2 million t. This is a 1.8% decrease y-o-y. Nevertheless, major state-run steel producers maintained their operation rates high, while private mills’ utilization rate, despite inching up compared to the previous year, still leaves much to be desired. Out of the above mentioned total volume, such mills as Mobarakeh Steel Company (MSC) including its subsidiaries, Khouzestan Steel Company (KSC), Esfahan Steel Company (ESCO), Khorasan Steel Complex (KSC Co), Iran Alloy Steel Company (IASCO) and Iran National Steel Industrial Group (INSIG) produced around 7.2 million t of crude steel, which means other steelmakers’ share did not exceed 1 million t. “Since major mills belong to the government they

have no other way but to work properly to support the economy,” one market source emphasized in conversation with Metal Expert.

The state support comes in the form of prioritized investments, loyal funding policy, subsidized raw materials prices and export permission despite international sanctions still being in place. “Local market has become even worse in the past few months. That is why state mills are so active in exports at the moment. This is their only way to survive crisis,” the source added. Currently only three Iranian mills are supplying steel goods to foreign customers. These are MSC, KSC and ESCO. In the first half of the year ended September 22 the country’s total steel export amounted to at least 1.85 million t, a 46% rise y-o-y, Metal Expert reported earlier.

� Iran: capacITy uTIlIZaTIon raTe of The leadIng sTeelmakersMill Crude steel capacity,

million tpyProduction in H1**,

million tUtilization

rate, %

Mobarakeh Steel Company (incl. subsidiaries)* 7.70 3.69 95.7

Khouzestan Steel Company 4.00 1.72 86.1

Esfahan Steel Company 3.00 1.17 78.2

* – Mobarakeh Steel Complex, Hormozgan Steel Complex, Saba Steel Complex. ** – H1 of the current Iranian year (March 21, 2015 – September 22, 2015).


Market overview

Iran likely to meet export targets for current yearDespite still being under international sanctions Iran is progressing in meeting bold export targets of 4 million t, set for the current Iranian year (March 21, 2015 – March 20, 2016).

In the first half of the year ended September 22 the country’s total steel export amounted to at least 1.85 million t, a 46% rise y-o-y. In the structure of sales the biggest shares were represented by flat products and billets, while merchant bars, sections and slabs were in minority. Major suppliers remained Mobarakeh Steel Company (MSC) – 750,000 t, Khouzestan Steel Company (KSC) with around 700,000 t and Esfahan Steel Company (ESCO) – 400,000 t.

Increasing exports is one of the ways to keep Iranian steel industry afloat as local market is not ready yet to give support to growing steel output. “We set an objective around 2 million t of exports this year and almost 50% of our objectives have been met. In fact, given the present conditions and problems facing domestic and export markets, our performance as far as exports are concerned have been good,” Bahram Sobhani, MSC CEO, has pointed out in the company statement.


Market overview

Tehran strengthens cooperation with Asia in mining and steel sectorsConsidering that over the period of sanctions Asian countries were Iran’s major customers for crude oil, economic ties between them became quite developed despite banking system difficulties. Now when international blockade is gradually falling off South Korea, Japan, China and India are strengthening cooperation, in particular in mining and steel sectors.

Recently Japanese steelmakers Kobe Steel and the state-run Japan Oil, Gas and Metals National Corp (JOGMEC) have announced interest in Iran’s mining projects. During the meeting with officials in Tehran JOGMEC Project director Satoshi Asawa indicated that his company could partner Iranian firms for financing metals and energy projects and transfer of technology, given the opportunity the conclusion of nuclear talks has created. “Iran is blessed with rich mines, including iron ore resources. One of the technologies owned by our holding is for extracting iron ore from a depth of 1,500 meters, which we can offer to Iranian companies,” commented Satoshi Asawa to local media. A lot of attention is now given to mining and steel projects in free trade zone of Chabahar on the coast of the Gulf of Oman, in particular Makran ore to steel plant with 3 million t capacity.

Chabahar is eyed not only by Japanese, but also by South Korean investors. Earlier in July POSCO voiced intention to increase presence in Iran by implementing their steel production technology FINEX there. In FINEX molten iron is produced directly using iron ore fines and non-coking coal rather than traditional methods, Metal Expert reported earlier. “A few steel companies in Iran already have contacted us if we can provide steel production technology such as FINEX,” POSCO’s CEO Kwon Oh-Joon commented to Reuters.

Another important partner of Iran is India. Since Iranian steel industry is predominantly DRI-EAF-based it demands significant volumes of pellets. However, as local pelletizing capacities are not sufficient, the country suffers annual lack of 7-8 million t of the product. To partially cover the needs


Market overview

of Iranian market Indian KIOCL will process both Iranian and Brazilian iron ore into pellets and ship them to Iran.

The list of Asian partners would not be complete without China. Within the framework of governmental plan to expand Iran’s steelmaking capacities up to 55 mtpy, Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) is working on seven 800,000 tpy DRI-EAF-based steel projects that are partially invested by Metallurgical Corporation of China. The first fruits of cooperation – three DRI-plants are expected to become operational

by the end of the current Iranian year (March 19, 2016).

Market insiders consider that Asia’s interest in Iranian projects is explained not only by attractiveness of this market but also by availability of Iran’s accounts in the banks of these countries. “Asians benefit much from this situation as it is some kind of barter and they do not use their money. They received oil and now exchange it for technologies and machinery,” Iranian trader commented to Metal Expert. Earlier it was also discussed that payment for KIOCL’s pellets will be effected from Iranian oil accounts in India.

Crude steel production expected at 18 million t in IranAs Iran’s economy might start showing the signs of improvement on the back of gradual sanctions removal steel producers set new production targets for the current year, that are to bring the industry one step closer to the desired 55 million tpy crude steel output by 2025.

This Iranian year (started March 21, 2015) country’s crude steel output is projected to reach 18 million t, according to Iranian Ministry of Industries, Mines and Trade (IMIDRO), an 8.5% rise compared to the previous year. Despite Q1 modest y-o-y change from 4.29 million t to 4.32 million t, last month (May 21-June 21) has already shown an improved result – 1.6% up to 1.41 million t y-o-y.

The major driver for improved production results will be the planned rise in steel

export volumes from 2.5 million t to 4 million t in the current year. Another positive factor is the improvement of economic environment in the country due to sanctions removal, that would mean the inflow of investments both in steel sector and consuming industries, such as construction.

“The result, of course will not be immediate but the revival of construction projects will need extra steel volumes,” one local producer told Metal Expert.


Market overview

Steel exports to double this yearSupported by production growth and government incentives Iran eyes doubling steel export this year (ending March 2016).

The country’s current export target is 4 million t of steel. “At present, the Ministry and Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) have provided suitable grounds for the export of steel in order to maintain Iran’s market share despite intense international competition,” Mehdi Karbasian Deputy Ministry of Industry, Mine, and Trade and Iranian Mines commented to Press TV. Export plans are spurred by the rise in steel output (5% in January-May y-o-y) to 6.9 million t, according to WSA.

In the structure of exports 50% will be represented by flat products, chiefly

Mobarakeh Steel’s and its subsidiaries, Metal Expert reported earlier. Another 50% will be semi-finished products. Khouzestan Steel, the major semis producer, in particular, is targeting to sell 1,5 million t of billets over the period, Metal Expert learnt from the mill representative.

However, if the issue of international sanctions is solved Iran will have a way more promising export future. According to the Islamic Republic’s 2025 Vision Plan, the country’s total steel production capacity is to hit 50-60 million tpy, with an expected exports figure of 10-15 million t.

Turkey – Iran free trade zone to boost steel trade between countriesSince nuclear deal has been struck, Iran is actively working on recovery of economic ties both on the global scale and inside Middle East region. In particular, the country is now in cooperation with its strategic partner – Turkey – for establishing a free trade zone on the border of the eastern Turkish city of Van and Hoy in northwestern Iran. The creation of such zone may give an additional spur to steel trade between the countries.

Before the increased pressure of economic sanctions in 2012 Iran could import up to 700,000 tpy of steel semis and 400,000 tpy of longs from Turkey. However, as Iranian steel market structure has changed since then, it turned from a net importer to an exporter. There were sales of some billet

volumes from Iran to Turkey in H1 2015, Metal Expert reported earlier. Moreover, the info was circulating around the market about the plans to supply slabs. “At first glance Iran is seen as a big steel importer, however, it is likely to become a serious exporting country also. Even so, with


Market overview

the lifting of embargo, we are planning to increase our exports to the country,” Namik Ekinci, the chairman of Turkish Steel Exporters Association (Celik Ihracatcilari Birligi, CIB) noted.

Market insiders’ opinion about the effect of such free zone on steel trade between the two countries differs. Some believe that Iran

will have more benefits from this. “There will not be a good way to export products to Iran as it is quite saturated. The most probable transactions will be billet exports to Turkey,” one local producer commented on the situation. The others say it is too early for conclusions as Iranian market may experience a dramatic change in consumption after sanctions removal.

Turkey’s plan to raise exports to Iran doubtful, prospects for imports look better

With economic sanctions to be lifted, Turkish steelmakers have high hopes for tighter cooperation on steel exports with Iran in the second half of 2015. However, changes that took place during the time of sanctions put a question mark over the plan of Turkish suppliers.

Turkey seeks to increase steel exports to Iran on the back of trade liberalization that will follow signing of a nuclear

agreement between Tehran officials and world powers, Turkish Steel Exporters’ Association (Celik Ihracatcilari Birligi, CIB) reports. Industry participants expect the first positive changes to come as soon as late 2015, though opportunities for economic recovery in Iran will not occur at once and only slight progress will be made by the end of the year, reconnection of Iranian banks to the SWIFT system in particular. “Turkish steel products will find their place in the Iranian market once trading restrictions are cancelled though Iran has increased its own export potential over the past few years,” CIB chairman Namik Ekinci claims.

Turkish exporters’ attempts to regain their share in the Iranian market are unlikely to turn out successful, considering that dominating scrap-fed EAF production reduces competitiveness of Turkish steel. Besides, Iran has boosted steel product capacity over the years of sanctions. Therefore, it is Iranian producers who will rather gain a foothold in the Turkish market, square billet and slab segments first of all, and shift the balance of power in the market. “There is interest in Iranian semis in Turkey, trial lots may be purchased soon,” one of major traders has told Metal Expert.

Over the time of trade embargo against Iran Turkish steel exports shrank to this destination, from 195,000 t in 2013 to 166,000 t in 2014, according to data provided by CIB. In H1 2015, shipments to Iran fell to 51,000 t, down 40% y-o-y.


iranian Mining

Iran plans $29 billion investment in mining and steel industry to balance production chainDespite rich iron ore reserves, Iranian mining potential is currently understudied and underused. However, to feed the country’s bold 2025 steel capacities expansion plans, Iran is planning to balance production chain. For this reason Iranian mining and steel industry is seeking for local and foreign financial support after the removal of international sanctions.

To produce 55 million t of steel, Iran will require 159 million t of iron ore, Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) assesses. Current extracting capacities stand at 56 million t, while under construction are just another 60 million t. To balance production chain Iran also needs to expand iron ore processing capacities. If targeted steel capacity is reached, it will require 88 million t of concentrate, 84 million t of pellets and 7 million t of sinter as well as 54 million t of DRI and 6 million t of pig iron, IMIDRO estimates.

Considering existing projects involved in production balance chain, only iron ore and concentrate segments remain underdeveloped, the industry lacking around 43 and 18 million t, respectively. However, if adequate investments are made, with proven reserves assessed as 2.7 billion t and studied reserves – as at least 4.5 billion t, the country can easily become self-sufficient in these products.

The major obstacle on the way to investments inflow now remains international sanctions. As they are removed, in total, the country plans


iranian Mining

$29 billion injection in mining sector, with significant share directed to iron ore mines development and exploration. At least 50% of this amount is expected to be attracted from abroad, as Metal Expert has learnt. “Current private sector iron ore projects

need $4.4 billion investments, while another $1.6 billion are expected to be sourced by the government for exploration in the next 4 years,” Iranian Iron Ore Producers and Exporters Association (IROPEX) official Sadjad Ghoroghi said.

� Iran: sTeel chaIn balance based on 2025 vIsIon (million t)Product Capacities

needed by 2025Currentprojects

Currentcapacities

Balance Productionin 2014*

Iron ore 159 60 56 -43 52.0

Concentrate 88 40 30 -18 24.1

Pellet and sinter 91 64 27 0 20.7

DRI and pig iron 60 34 26 0 15.5

Steel 55 33 22 0 16.1

Source: IMIDRO* – IROPEX

Yazd Rolling Mill to strengthen positions in raw materials marketIran’s vast steel capacities expansion plans – to 55 million tpy – will require significant amounts of raw materials. Thus, Iran’s Yazd Rolling Mill continues to work over processing projects to take the share of this promising market.

For this reason in September the company finalized a deal for the purchase of 400,000 t pelletizing plant in Yazd province, as it was earlier planned. According to the company representative, it is ready for operation. The commissioning will take place in several weeks. The company’s expansion pro-gramme includes another pelletizing plant with the same capacity. Now Yazd Rolling Mill is waiting for the final lots of machinery to be delivered in the coming two months and then will start its installation, which is ex-pected to be finished by the end of H1 2016.

Concentrate for the first pelletizing plant will be delivered from the company’s 500,000 t

beneficiation plant. The second pelletizing line, when installed, will be first fed with concentrate from the local market.

Nevertheless, Yazd Rolling Mill administration does not exclude possibility to install 1.65 million tpy beneficiation plant in Kerman province and partially supply pelletizing plants located in Yazd in the future. However, at the moment this project together with 1.2 million tpy pelletizing plant (Kerman) remain on hold. “We are now mainly working on investment programmes and current assets located in Yazd,” the company representative told Metal Expert.


iranian Mining

MIDHCO expands despite tough economic conditionsDespite difficult financial environment in Iran, Middle East Mines and Mineral Industries Development Holding Company (MIDHCO) continues to work over expansion projects according to the schedule.

This year the producer has commissioned two concentrate plants at Sirjan Iron and Steel Company (SISCO) and Zarand Iron and Steel Company (ZISCO), 2 million tpy each, which increased its nominal capacity up to 8 million tpy. According to the company’s latest report it targets to produce 5.1 million t of concentrate in 2016.

By the end 2015 – early 2016 the producer will also commission two pelletizing plants at SISCO and ZISCO, 2.5 million tpy each as well as 1 million tpy steelmaking plant Bardsir at SISCO, Metal Expert has learnt from the company representative. Thus, production at SISCO will be integrated, while ZISCO will be able to supply raw materials to the free market. However as in 2016-2017 the producer is planning to install 1.7 million tpy BOF-based steelmaking plant at ZISCO, raw materials will later be used for own production.

The expansion program also includes Butia Iron and Steel Company (BISCO) with 2.5 million tpy pelletizing plant (to be commissioned in 2016-2017), 2 million tpy DRI-module and 1.5 million tpy steelmaking plant that are expected to come on stream in 2017-2018.

When the projects are realized, MIDHCO will be capable of producing 7.5 million tpy of pellets, 3 million tpy of DRI and 4.2 million tpy of steel. Situated in Kerman province, which has a beneficial location in the south of the country, MIDHCO mills will serve not only domestic but also foreign customers. “The company not only puts no financial burden on governmental budget but also decreases portion of basic metals import to provide foreign exchange savings for the country and creates potential in exports of raw material,” a MIDHCO representative commented to the local press.


iranian Mining

Iran may stop iron ore exports starting from March 2016Considering the aggravated situation in the global iron ore market as well as bold steel production expansion plans, Iran may stop iron ore exports already starting the new year (March 2016).

For the last several years Iran used to export over 20 million t of iron ore annually. The major customer was China. However, as demand-supply balance in the global market was destabilized in 2014 and prices started to plunge, Iranian iron ore producers had to limit export volumes. This led to the decrease in production and even caused closure of some small mines. “Almost the

total production of private iron ore mines will shut down if iron ore keeps below $45/t or $50/t level,” said Keyvan Jafari Tehrani representative of Iranian Iron Ore Producers and Exporters Association (IROPEX).

In these conditions Iran is planning to stop iron ore exports and to use them in enhancement of local steel production. “Implementation of the projects to produce concentrates and pellets in the country has been intensified. Starting from March 2016 we will have no more iron ore for export,” Mehdi Karbasiyan, deputy minister of Iranian Mines and Mining Industries

Development and Renovation Organization (IMIDRO) told ISNA. According to Metal Expert’s data in 2015-2016 around 20 million t of pelletizing capacities will be commissioned in Iran.

By 2025 Iran is planning to produce around 50-55 million t of crude steel, Metal Expert reported earlier. This, according to IMIDRO report, will require around 57 million t of DRI, 86 million t of pellets and 86 million t of concentrate. To fulfil this plan Iran will need around 138 million t of iron ore. Considering these figures Iran will have to not only stop iron ore exports, but also expand current capacities now amounting to around 56 million t.

According to Iran’s Custom Organization, during the first quarter of the current year (March 21, 2015 – July 21, 2015) Iran exported 3.419 million t of iron ore, which is 22% less than in the same period of the previous year. Some market insiders believe that this decline caused the increase in iron ore prices in China in May-June, however further decline in volumes will have no effect on prices. “Iranians and other non-mainstream miners have been cutting export volumes for a while already. I believe the decision to halt shipments will not have any impact on the global price curve, as Australians are still working on capacity expansion projects. They will offset any declines made by others,” one Chinese trader commented to Metal Expert.


iranian Mining

India’s KIOCL to partially cover Iran’s pellet needIndian state company Kurdemukh Iron Ore Company Limited (KIOCL) is in negotiations with Iran to supply pellets, as the latter does not have ample capacities to cover own needs in high quality raw materials.

Since nuclear deal was finally struck, Iran’s steel industry is supposed to start growing in the near future. However, lacking high quality iron ore, the country will need extra volumes of pellets to feed steelmaking facilities. “The production of pellets in Iran is not sufficient yet. There is a need to import 7-8 million tpy,” Keyvan Jafari Tehrani, Head of International Affairs at the Iranian Iron Ore Producers and Exporters Association commented to Reutes. Last Iranian year (ended March 2015) Iran produced 21 million t of iron ore pellets, while demand reached a bit less than 30 million t, Metal Expert reported earlier.

For this reason, Iran is planning to sign pellet supply deal with India’s KIOCL for around 2 million tpy of the product. KIOCL will initially buy 80,000 t of high-grade concentrate containing 67% Fe from Anglo American’s Brazil operations by September, convert it into pellets and then sell to Iran for about INR 500 million ($7.8 million), according to the company’s chairman Malay Chatterjee. Also, under the terms of the deal Iran is going to bring in 1 million t of low-quality iron ore to India to process it at KIOCL’s coastal facilities and then export back to Iran.

Another suppliers, such as Oman, that traditionally exports pellets to Iran, and

Kazakhstan, waiting for the economic sanctions to be removed, are both eyeing the possibility to enjoy increased demand at this destination in the near future. However, in a longer prospect Iran plans to become self-sufficient and develop its own pellet-making facilities that are expected to skyrocket to around 50 million tpy in the next three years, Metal Expert reported earlier.


iranian Mining

Neyriz Ghadir Steel Company to supply local market with DRI by end-2016Neyriz Ghadir Steel Company (NGHSCO, Iran) is to add to country’s DRI output and to cover partially growing needs of local producers within the framework of governmental programme intended to increase steelmaking capacity to 55 million tpy by 2025.

NGHSCO continues to work on 800,000 tpy DRI module. The facility is expected to succeed thanks to its beneficial location in the south of Iran (Fars province), where most of the new steelmaking projects are concentrated.

With DRI-module installation being 75% complete, NGHSCO plans to start production already in H2 2016, Metal Expert has learnt from the company’s representative.

NGHSCO was also eyeing the installation of an 800,000 tpy steel melt shop for billets production, however, the construction works have been put on hold until financial and market situation in Iran improves. No dates are commented now.

Initially, the venture was wholly-owned by the national holding IMIDRO, which attracted the private Iranian investor Ghadir Industries and Mines International Company, currently holding 65% equity.

Metal Expert

Iran in FocusMay 2016

Nuclear deal to breathe new life

into Iran’s steel export

Khouzestan Steel’s billet export

potential yet to be unleashed

Mobarakeh Steel:

exports the only way out

of recession in Iran

Interview:

EAF producers should become

more aware of DRI use

Metal ExpertSquare Billet in Focus

April 2016Nuclear deal to breathe new life into Iran’s steel export

Khouzestan Steel’s billet export potential yet to be unleashedMobarakeh Steel: exports the only way out of recession in Iran

Interview:EAF producers should become more aware of DRI use

Metal ExpertEurope in FocusMarch 2016

Nuclear deal to breathe new life into Iran’s steel export

Khouzestan Steel’s billet export potential yet to be unleashedMobarakeh Steel: exports the only way out of recession in Iran

Interview:EAF producers should become more aware of DRI use

Metal ExpertIran Perspectives in Focus

December 2015

Nuclear deal to breathe new life

into Iran’s steel export

Iran’s export potential

in longs and semis yet to be

unleashed

Mobarakeh Steel:

increasing exports is the only

way out of recession in Iran

IGISCO:

EAF producers should become

more aware of DRI use

Metal ExpertSquare Billet in Focus

August 2015Billet imports to replace foreign scrap in Turkey

Al Jazeera Steel: “No point in own steel making”

Iron ore surplus not to rise in 2015

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