TEHRAN, Iran, May 13
Trend:
Iran's steel production will be affected by new export policies during the coronavirus spread, Managing Director of Bisotoun Steel Company Jahandar Shokri told Trend.
"Workers continue to work and follow health protocol, so there is no concern over steel production during this situation, and the only major problem is the new regulation of exports," he said.
"The Ministry of Industry, Mine and Trade recent announcement for steel ingot producers is a sudden decision over export of the product that would hit producers the most," the managing director said.
"Offering 60 percent of steel products in Iran Mercantile Exchange and 25 percent at the export exchange is very odd decision, since the producers should increase the non-oil export during current economic situation; however, these decisions will reduce the export volume," the official added.
"Trading steel at the mercantile exchange will only lead to economic rent, the current price of steel at the mercantile exchange is 65,000 rials [about $1.5] per kilo, while the price of this product at free market is 110,000 rials [about $2.6], so the price gap would cause economic rent," he said.
"It has been said that the steel producer can either export 25 percent of their steel products or offer a specific volume on mercantile exchange to be exported," he said. "The mercantile exchange decisions are not fair; exporters and producers can hardly introduce their brand to a foreign country, so this approach will prevent the export in various ways."
"The announcement had caused a hard blow to producers. While the global sale is done based on supply and demand for goods, in Iran, the price is set based on orders," he added. "We continue to produce but various instructions will create obstacles; meanwhile, in the leap production year, various exemptions and advances should be implemented including social insurance, fee exemption and bank loans."
"Iran's Steel Producers Association plans to submit its suggestions to the ministry this week in this regard," he said.
Iran has predicted to increase steel production by 11 percent from 27 million tons to 30 million ton in current Iranian year (began March 20, 2020); however, in case the steel export reduces, the production will drop sharply in steel industry.