Posted on 28 Nov 2018
Continued raw materials sourcing challenges are curtailing Esfahan Steel (Esco)’s capacity utilisation to 55%, according to managing director Mansour Yazdizadeh.
Esco’s billet casting design capacity is 3.6 million tonnes/year, although the firm is able to produce up to 4m t/y. However, it is currently only working at 2.2m t/y due to the volatility in supply of raw materials, especially iron ore. The main reason for this that iron ore miners have invested into vertical integration, launching their own iron and steelmaking capacity and reducing iron ore supply to the merchant market. Moreover, iron ore is exported due to its profitability abroad, he adds.
We are looking to maintain our share in global markets,” Yazdizadeh says in a note seen by Kallanish. “We have agreed to export to Iraq and Afghanistan. We are also issued (foreign) currency, of course. Exports to Iraq and Afghanistan are profitable for the company.” The firm has also established a foothold in Southeast Asia, he adds.
Esco’s long-awaited pulverised coal injection (PCI) unit is seen being launched in February. This will significantly reduce the firm’s coke consumption. Esco has made the right decision switching from imported coke to sourcing from Midhco’s Zarand coke plant, Yazdizadeh observes.
In other news, former Mobarakeh Steel chief executive Bahram Sobhani has been appointed as Esco chairman, replacing Hossein Naji. The experienced steel executive is also chairman of the Iranian Steel Producers’ Association.
