Russia, Kazakhstan cut hot-rolled steel coil exports to Iran: traders
ArcelorMittal Temirtau to stop supplies due to sanctions
MOSCOW/LONDON, July 17, (RTRS): Russia and Kazakhstan are cutting back sales of hot-rolled steel coils to Iran in part because of new US sanctions on Tehran, steel traders said.
The development shows that, despite protests from the Kremlin that unilateral US sanctions should not affect Russian companies, the firms are changing their behaviour for fear of falling foul of US sanctions.
Imports of Russian and Kazakh hot-rolled steel coils — used in industries from pipes to cars to agricultural equipment — make up only a small part of Iranian consumption, and can be replaced. The imports were already slowing before sanctions because of low prices and weak demand.
But the US sanctions have accelerated the slowdown, traders said.
The coils are shipped to Iran by Russian steelmakers Severstal and MMK along with ArcelorMittal’s plant in Temirtau, Kazakhstan.
“I believe that Arcelor and the likes are cutting trade with Iran because of (US President) Donald Trump’s pressure on big companies,” an Iranian trader said.
Alex Agoureev, an adviser to Paramjit Kahlon, CEO of ArcelorMittal CIS, confirmed that the company plans to suspend supplies to Iran due to the US sanctions. ArcelorMittal is the world’s top steel producer.
“Supplies to Iran will be temporarily suspended due to the sanctions. Once sanctions are lifted, the supplies will be resumed,” Agoureev said.
He did not say when the suspension would happen or provide further details.
Severstal and MMK declined to comment. A spokesman for the Iranian ministry of industry, mines and trade also declined to comment.
In May, Trump pulled the United States out of an international nuclear deal with Iran and promised to reimpose US economic sanctions on Iran to undermine “a horrible one-sided deal that should have never, ever been made.”
As a result, a number of European energy and financial groups have said they will end projects in Iran or suspend dealings with the country.
US measures due to kick in after a 90day “wind-down” period ends on Aug. 6 include sanctions on the purchase or acquisition of US dollars by the Iranian government, on Iran’s trade in gold and precious metals, and on the sale, supply and transfer to or from Iran of graphite, raw or semi-finished metals, coal and industrial-related software.
Russia and European Union states opposed the US withdrawal from the deal. Russian President Vladimir Putin and French leader Emmanuel Macron have both said they will resist any move by the US authorities to punish Russian or French companies for doing business with Iran. In a speech in May, Putin referred to US laws being used to force
non-US companies to pay fines. “We need to put an end to this. It’s not acceptable,” he said.
However, business executives have to confront the reality that many of their transactions are in dollars, which means they are exposed to US jurisdiction.
That makes it risky for them to ignore US sanctions.
Despite a promise by Macron to protect French business interests from any fallout from US sanctions on Iran, French oil major Total announced it may pull out of Iran unless it secures a
waiver from the sanctions.
According to CRU, a market intelligence group specializing in metals, mining and fertilisers, Iran’s net hot-rolled (HR) coil consumption was 5.6 million tonnes in 2017, of which 0.8 million tonnes were imported.