Iranian government goes ahead with duty on exports of steel products: source

Iran has imposed an export duty on steel products despite efforts by the Iranian steel producers association, or ISPA, to prevent it from being introduced, an industry source told S&P Global Commodity Insights April 13.

The duty took effect March 21, the beginning of the new Iranian year, following a government directive, the source said.

"There is no sign that the government's decision to support domestic demand will change so exports are uncertain now," the source said.

On April 9, Iran's Ministry of Industries issued a formal directive that implemented an export duty on several commodities, including the steel value chain, to boost prices in the domestic market.

According to the directive, the duty is not a fixed percentage and will be amended proportionally to the change in prices on a monthly basis, but at the moment it is around 22% for slabs, 17% for billet, 17% for DRI, 11% for iron ore pellets, 14% for concentrated iron ore, 11% for hot-rolled coal and 5% for cold-rolled coil, hot-dip galvanized coil and rebar.

This was an estimate and has not yet been announced, a market player said.

It was unclear whether the duties would be imposed on products that have already been exported, with more clarification awaited from the government.

"Many details are not yet clear, and we will have to wait for further details to determine exactly whether exports are possible under these conditions, as well as the outcome of the steel producers association's negotiations with the government," he said.

The same export duty percentages were heard in Turkey, with a manager of a Turkish long steel producer in southern Turkey and a trading source in the same region both having received the information and the former having confirmed it with a long steel producer in Iran.

Market sources in Turkey reported Iranian billet being offered in recent weeks to Turkey at prices below Russian-origin offers of $790-$800/mt CFR Turkey, while domestic billet offers were in a range of $870-$900/mt EXW.

According to the latest data from the Turkish Statistical Institute, Turkish buyers imported 7,000 mt of billet from Iran in the first two months of 2022, from zero in the same period of 2021, and 21,100 mt of rebar, up from 11,600 mt.