The dismissal of Iran’s industry, mine and trade minister Reza Rahmani has given Iranian steelmakers hope that recently-implemented export restrictions will be abolished. Rahmani has been replaced this week by Hossein Modares Khiabani.

The ministry previously issued an order saying steelmakers are permitted to export only 25% of their production in an attempt to reduce steel tonnages leaving the country. Mills are also required to offer 60% of their output on Iran’s Mercantile Exchange for sale to the domestic market.

“It is struggle based on the domestic upward trend in prices,” an Iranian steel mill source tells Kallanish. “Mills are fighting for its removal… I do not think […the restrictions] will be practical.”

This comes at a time when the domestic construction industry is going through a recession and long steel consumption is therefore declining, the Iranian Steel Producers Association (ISPA) points out. Moreover, Iran has announced it is targeting a “… production jump” of 11% on-year in the Iranian year through 20 March 2021 to 30 million tonnes of crude steel. This means there is likely to be more excess supply in the local market.

Despite giving the order, the ministry concedes that long steel consumption is expected to decrease further this year due to the impact of the Covid-19 pandemic. Iranian apparent rebar consumption fell -2% last Iranian year to 6.1mt due to sluggish construction demand. Long product exports grew 26% to 2.65mt. Semi-finished product exports also rose 26% on-year to 6.91mt.

If steel exports are curbed, “… not only will production not increase, but it is likely that for the first time in recent years, Iran’s steel production will also decrease,” ISPA says.

Last month the association warned of a decline in Iranian steel exports and foreign currency income on account of the Covid-19 pandemic and government restrictions on exports (see Kallanish passim). The association requested all restrictions be lifted immediately. It also asked for the development of exports to be made the priority of Iran’s market regulation working group, and for export incentives to be introduced.