2013-08-28 08:37:37 - Fast Market Research recommends "Iran Metals Report Q4 2013" from Business Monitor International, now available
The outlook for Iran's steel sector remains poor; however, there are a few signs of light given the election of Hassan Rouhani and possible moderation in tone towards the West. On the whole, however, we are far from sanguine given our bearish outlook for steel prices and the fact that any rapprochement with the West, if indeed it happens, will be drawn out and not have a significant impact in the near term. We note with scepticism, Iran's plans to increase its steel capacity from 20mn tonnes per annum (mntpa) to 55mntpa by 2025, as well as a tripling of aluminium smelter capacity to 1.5mntpa.
While a cut in external trade has impacted negatively on the steel industry, isolation has ensured
that imports have also been restricted. However, domestic industrial deficiencies in certain market segments mean that Iran will struggle to meet its own needs in spite of declining consumption. Crude steel output rose 11.1% year-on-year (y-o-y) to 13.27mn tonnes in the first 11 months of 2012, representing one of the strongest growth rates in the world, rivalling Turkey's.
Full Report Details at
Nevertheless, due to infrastructural problems and a lack of billet and rebar capacity, the country is still dependent on imports to serve the market, mostly from Turkey. Meanwhile, growth in the manufacturing of steel products has slowed markedly, with existing crude steel capacities unable to sufficiently supply to downstream industries and therefore exacerbating the dependence on imported supplies. Weak points remain, with flats demand coming under pressure as automotive output suffers from declining domestic demand. Over the medium term, Iran will be reliant on exports, at a time when it is becoming harder to sell on external markets.
Iranian trade has been affected by international sanctions, with the country having to manoeuvre strategically to meet domestic demand and maintain the robust production growth seen a few years ago. Iranian steel production grew by 10.0% and 8.7% in 2010 and 2011, and BMI forecasts that growth will remain robust in Iranian steel production; however, this will begin to slow down from 2014 until the end of our forecast period in 2017.
The country's political situation has affected many of its trade dynamics and the negative impact on imports and exports of steel has meant that the domestic industry has had to find a way to ensure that demand is met by ramping up production and clearing stockpiles to make room for imported steel.
Prior to the intensifying international sanctions imposed on Iran, the nation would rely on a significant amount of exports to other Arabian countries in the Gulf region; however, companies in the Arabian Gulf have simultaneously been expanding their capacities rampantly off the back of sustained demand in the region. This has meant that steel prices in Iran have been heading downwards as companies seek to offload their steel stockpiles by selling at a lower price. Adding to the overall weakness and testing times for the Iranian economy as a whole is the weakening rial, making trade in the country highly problematic.
Outlooks for metals-intensive sectors - specifically construction, infrastructure and automotives - are all in negative growth territory, meaning further obstacles for growth in the Iranian metals industry.
Report Table of Contents:
BMI Industry View
- Steel: Modest Growth Despite Sanctions
- Table: Iran - Steel Production Forecasts ('000 tonnes, unless stated otherwise)
- Table: Iran - Steel Production Historic Data ('000 tonnes, unless stated)
- Tax Regime
- Table: Iran - Political Overview
- Steel Price Forecast
- Table: BMI Steel Forecast
- Table: Steel Forecast
- Monthly Metals Update
- Aluminium: No Turnaround Yet
- Copper: Declines Back On Track
- Nickel: More Room To Fall
- Zinc: Weakness To Persist In H213
- Table: Select Commodities - Performance & BMI Forecasts
- Table: BMI Commodities Strategy
- Little Room For Newcomers As Sanctions Bite
- Table: Production & Sales By Producer (2012)
- Table: Largest Listed Metal Producers In Middle East
- Mobarakeh Steel Company
- How We Generate Our Industry Forecasts
- Cross Checks
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.