Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Impact of US sanctions on Iran steel, iron exports limited: sources

Electricity | Metals

The LFP resurgence in electric vehicles


Platts World Steel Review

Energy | Electric Power | Electric Power Risk

Nodal Trader Conference, 13th Annual


S Korea's longest monsoon on record to push Q3 gasoline demand 12% lower

Impact of US sanctions on Iran steel, iron exports limited: sources

London — Fresh US sanctions against Iranian steel exports are likely to have little impact because pricing remains attractive to buyers in Asia, Iran-based sources told S&P Global Platts.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"The recent US sanctions are not expected to have a big impact on Iranian steel producers as long as steel products continue to have attractive prices," a trader said.

"Even during the previous sanctions Asian buyers were not put off from purchasing from Iran so I don't think these new sanctions will have an effect, in particular now the riyal has depreciated."

The riyal has lost 4.3% in value since Iranian General Qassem Soleimani was killed in a drone strike in Baghdad on January 3.

However, some traders concede the new sanctions may affect sentiment.

"The sanctions of course are not without effect; some customers may be reluctant to deal with Iran," said Reyhaneh Sarlek, an Iran-based steel market specialist. She noted that these sanctions are likely to present more obstacles to trade with Iran than the previous round of secondary sanctions. Insurance and shipping costs may increase as a result, various traders said.

Secondary sanctions were introduced last year on some metals and mine products.

"Domestic mills can be very competitive although some costs have increased such as freight," the first trader said. "Locally, inflation, which is already high, can be a problem for domestic steel demand."

Iran's steel exports have increased during the period of secondary sanctions against the country, according to data from Iranian mines and metals holding group Imidro. Much Iranian steel is in any case traded offshore, via traders in locations including Dubai. One international trader told S&P Global Platts he had heard of an Iranian steel trade involving "switching off the BLs and other documents."

Market sources said China can be expected to continue to import some Iranian steel, mainly via Chinese companies active in the Middle East. Chinese buyers have been taking an increasing tonnage of Iranian billets, slab and pig iron since June when China banned scrap metal imports and domestic prices soared as a result. Chinese customs data shows it imported at least 400,000 mt of Iranian billets and slabs over January-November.

Amid tensions between the US and Iran before the latest sanctions were announced Friday, the Indonesian government had already asked local buyers to avoid Iranian billet. One major Indonesian importer alone had been buying around 200,000 mt/year of Iranian billet. Other recent buyers of Iranian steel include Thailand, Oman and Iraq.

Turkey also buys from Iran, although as one of the largest producers of rebars, it gets most of its supply domestically. It imported 141,300 mt of rebar from Iran in the first 11 months of the year, up sharply from 30,700 mt in the same period of 2018, according to the most recent data from the Turkish Statistical Institute (TUIK), as cheaper Iranian rebar offers to Turkey spurred buying interest, especially in the east of the country. In the whole of 2018, Turkey imported just 50,320 mt of rebar from Iran.

Iran's main steel producers, excluding small private sector mills, exported 5.2 million mt of finished and semi-finished steel in the first nine months of the current Iranian year (to December 21), up 19% year on year. However, in the past month alone exports totaled 485,000 mt, a 91% increase year on year, according to data from Imidro. Iran's steel production capacity is expected to reach 43.6 million mt/year by the end of the next Iranian year (March 20, 2021), while Imidro estimates production in the current financial year hitting 31.1 million mt/year as the country continues with an ambitious steel capacity expansion program. Iran's current steel production capacity is 35 million mt/year.

Mobarakeh Steel Company (MSC) exported 1.1 million mt in the nine-month period, 47% more than the same period a year ago, and in the last month (to December 21), its exports totaled 99,000 mt, up more than sevenfold. Some 593,000 mt of slabs, a semi-finished steel product, were exported during the period by an MSC-affiliated company, Hormozgan Steel Company (Hosco) in the nine-month period, up 19% year on year.

With some 1.37 million mt of slab and billet, another semi-finished product exported during this period, Khouzestan Steel Company (KSC), Iran's second-largest producer, reported a 17% year-on-year decrease in exports. In the last month KSC exported 108,000 mt of semi-finished products, down 22% year on year, with the decline attributed to greater domestic sales.

South Kaveh Steel (SKS) exported 608,000 mt of billet, 23% more than the same period last year and in the last month its exports totaled 56,000 mt, a 33% decrease.