Iran announces small export duty hike for semis, raises duty on raw materials significantly

Iran’s Ministry of Industry, Mining and Trade has announced revised export duties for semi-finished steel and raw materials, aiming to regulate foreign trade and balance local requirements. However, while the measure for billet and slab is considered to be reasonable, the restriction for some raw materials is evaluated as “unnecessarily tough”.

According to sources, Iranian billet and slab are now subject to two percent export tax, which will hardly affect trading activity much. In fact, semi-finished production is excessive in Iran and exports are quite lively, especially to Asia and GCC countries. In the last Iranian year (March 21, 2022 to March 20, 2023) Iran exported close to 7.4 million mt of semis, which is slightly below the previous period. Billet accounts for at least 70 percent of total semis exports from Iran, SteelOrbis estimates.

In the raw materials segment, the export duty on iron ore has been increased from 0.5 percent to 20 percent, which, according to the parties involved in this trade, will most probably result in the stoppage of sales, at least temporarily.

Another issue is that, according to market players, the export restrictive measure is a retroactive one, taking effect from March 20 this year, although the decision was announced very recently. “It means that all the cargoes shipped since then will be subject to the tax, which is not fair and it is too much to pay for nothing,” a trader told SteelOrbis. Some market players, however, assume that the measure will accumulate large excessive volumes of raw material in Iran and and so the government will soon be forced to revise the measure.