Output growth has been encouraged, in part, by the weakening of the rial in H210, a trend that boosted domestic metals producers which had witnessed declines in orders and output in Q2. The central bank audi had attempted to shore up the currency, but there has also been a rush towards hard currency amid stricter economic sanctions. Mobarakeh Steel produced 3.34mn tonnes of semi finished steel and 3.44mn tonnes of hot rolled coil in the first nine months of the 2010/11 Iranian year (beginning March 20), up 1% and 14% year-on-year (y-o-y) respectively. The company plans to up output by over 8% to 5.3mn tonnes in 2010/11 and aims to reach a capacity of 9-10mn tonnes per annum (tpa) by 2014. Current production figures do not bode well for achieving these targets. Much will depend on the fortunes of the car industry, which in turn relies on sustained private consumption growth. Mobarakeh Steel subsidiary Saba Compact Strip Processing Plant produced 448,000 tonnes of thin slab and 485,000 tonnes of HRC in 9M10/11, also increasing average production by 14% y-o-y. Billet output from Khorasan Steel reached 419,000 tonnes in the period, while rebar output totalled 433,000 tonnes.
According to the Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO), rolled steel output was 7.52mn tonnes, up 14% y-o-y during the first eight months of the 2010/11 Iranian year. Output included 1.31mn tonnes I Beam, 2.14mn tonnes of rebar, 3.78mn tonnes HRC, 220,000 tonnes wide plate, 39,000 tonnes coil and 20,000 tonnes pipe. Semi finished production totalled 7.58mn tonnes over the period. Around 80% of HRC was produced by Mobarakeh Steel, the country's largest sheet steel producer. Esfahan Steel produced around half of the nation's long products and sections.
Output has been supported by capacity additions, particularly in value-added segments such as automotive-grade sheet steel and stainless steel. New steel mills include the Hormozgan Steel plant, the commissioning of which was put on hold due to delays in imports of equipment. The Hormozgan mill has a capacity of 1.5mn tpa of slab and began production in H210. In November 2010, Iran opened the Middle East's largest galvanised steel mill, which is jointly owned by the Saypa Company, Iran Khodro Company and Steel Industry Pensioners' Support Fund. The mill, located in Chahar Mahal Bakhtiari province, has production capacity of 400,000 tpa galvanised flat steel for the local automotive industry. In January 2011, construction began on a new mini mill, with annual production capacity of 1mn tpa steel billet, at Abarkooh, Yazd province. Investment in the project is estimated at IRR6trn.
In December 2010, Khorasan Steel started the construction of a 2.5mn tpa palletising plant. The plant, which is to be constructed by Parsland Mines & Industries Development Company within 30 months, will be expandable to a capacity of 3.4mn tpa. The company has already put its two DRI units, each with a capacity of 800,000tpa, into operation. It also plans to set up a new melt shop as well as upgrading its existing melt shop. The Ministry of Industry and Mining has also issued permission for the construction of a privately-owned 1.5mn tpa steel mill in Kashan in Isfahan province.
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