گزارش تحلیلی بیزینس مانیتور-صنعت فلزات درایران-سه ماهه اول2011

In the first 10 months of the 2011 calendar year, Iranian crude steel output grew 10.6% y-o-y, to 10.9mn tonnes, continuing the strong growth of the previous year. According to the Iranian government, 8mn tonnes of crude steel was produced in the first seven months of the current Iranian year (starting March 21 2011), an increase of 14.3% y-o-y, with output by ‘private’ producers up 53% y-o-y, to 702,000 tonnes. Output is being bolstered by rapid expansion of capacity. However, with 20mn tpa of steelmaking capacity, the industry was operating at just 66% full operational capacity, up from an estimated 60% in 2010, but nevertheless lower than the rate that BMI believes can ensure long-term profitability.

Monthly crude output growth rates are sluggish and are not set to move much beyond 1.1mn tonnes, despite the additional capacity that came onstream in recent months. As such, BMI expects total output of 13.0mn tonnes in 2011. Low capacity utilisation will undermine the profitability of the Iranian steel industry as well as potential market instability.

With crude steel consumption estimated at 20mn tonnes in 2011, Iran is dependent on net imports amounting to a third of its overall needs. While this demonstrates the considerable potential of the Iranian market, the domestic industry is unable to satisfy the country’s needs due in part to the technological problems caused by lack of investment and expertise that would come with the involvement of global majors.

Over the next four years, aluminium and copper production capacities are set to rise by 400,000tpa each, according to the government. This will push aluminium capacity to over 900,000tpa and copper capacity to over 600,000tpa. BMI believes the industry will fall well short of its targets, however, due in large part to the effects of sanctions. Even in the absence of new sanctions, the financing, expertise and infrastructure would not be sufficient to achieve the aspirations of the steel industry, with some projects set to see lengthy delays.

International sanctions will affect aluminium producers more than steelmakers with their impact already being seen on aluminium consumers. Inconsistent pricing with lower prices on the LME has simply complicated the situation, with aluminium consumers bypassing local traders and sourcing raw material from foreign markets. At the same time, the energy needs of smelting operations require an increase in electricity generation and aluminium producers are keen to see the establishment of large-scale nuclear power stations, mindful that the country’s oil, gas and hydroelectric potential will not be enough. The US’s opposition to Iran’s nuclear programme therefore poses a major obstacle to the development of Iran’s aluminium industry. The inauguration of the 147,000tpa Hormozal smelter in Hormozgan in late 2010 boosted primary aluminium production in 2011, although we are not confident that the plant will produce at full operating rates.