Iran's steel demand higher than supply

At present Iran has an annual demand of 15 million tons for steel, while the combined production of the country's steel plants is about 10 million tons per annum. Demand is increasing at a higher rate than supply in spite of all the development projects of the existing plants along with the construction of new plants which resulted in a continuous increase in production during recent years. The Iranian government together with the private sector, backed by rising petroleum prices, has launched many industrial construction projects which all require different types of steel. The construction sector which is managed mostly by the private sector, is showing a trend of rapid market demand growth after 4-5 years of depression. According to Iranian Custom House reports, during the last six months Iran has imported about 2,750,000 tons of steel worth around $1.5 billion. The same volume of imports is expected for the coming 6 months. However, the high demand for I-beam and debar during recent months has caused a rapid price increase in the Iranian market. Nowadays, the Iranian government, by means of omitting custom duties and stopping exports of I-beam, has succeeded in controlling the rising price of I-beam and debar. Nevertheless, the prices continue to remain above global level. At present, I-beam and debar have an average price of $750 and $650-670 respectively in the local market. Import statistics of steel for the last 6 months (21.03.2006-22.09.2006) issued by Iranian Custom House:

Product                 Metric tonnage        Value US$

I-beam, H-beam             217,581               - 
& profiles:        

Round bar                  179,328             79,855,000 
(debar & plain bar): 

HR coil/sheet:             758,124            502,777,000   

CR coil/sheet:             418,998            269,826,000 
           
HDG coil/sheet:            178,861            158,028,000            

SS coil/sheet:              17,689             44,314,000

Alloy steel coil/sheet:     20,135             39,610,000     
 
Carbon steel wire rod:      10,770              7,458,000 
 
SS wire rod:                   438              1,102,000
  
SS round bar:                1,691              4,120,000
 
SS profile:                    880              1,534,000

SS billet:                   2,196                996,000  
  
Billet:                    772,313            304,806,000 

Ferro alloy:                20,341             18,573,000 

Iron powder:                35,340             10,091,000 

Steel scrap:                80,228             15,871,000