The Iranian Cabinet approved and announced last week an increase in export duties on raw materials and semi-finished products for steel production, imposing duties retroactively from the beginning of the Iranian calendar on March 21, 2023.
Export duty on raw materials and semi-finished products was previously 0.5% and has now increased to 2% for billet and slab, 5% for direct reduced iron, 20% for hematite and magnetite iron ore and concentrate, and 20% for pellets. . The duties are also 1% for the export of billets and slabs made from scrap, and 80% for the export of scrap.
“Last year, the Budget Law stated that export duties on raw materials and semi-finished products were set at 0.5%, but now the Cabinet of Ministers has interpreted the relevant article of the Budget Law and increased export duties,” the industry analyst explains. “From the date of the announcement on July 12 until the beginning of the Iranian year on March 21, exporters will have legal problems against the decree on non-payment [of duties].”
The new decree, which will significantly affect the export of raw materials, was welcomed by some factories.
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“Finally, a good decision on export duties,” said a high-ranking official of the plant. “Because we don’t have the capacity to produce almost 40 million tons of slabs and billets a year, it would make sense to impose these high duties on items so that the industry can produce more products and hire more workers.”
“This year was better than in the past, despite the shortage of electricity and restrictions on the gas supply. By imposing high duties on LHP, pellets, concentrate and iron ore, we [Iranian mills] can reach a capacity of 35 million tons per year, but only if the government does not increase export duties on other goods [semi-finished products and finished steel].”
