Impact of economic recession on Iran’s steel market

Business Materials 8 December 2015 15:27 (UTC +04:00)

Baku, Azerbaijan, Dec. 8

By Khalid Kazimov - Trend:

Iranian steel producers have to keep more than three million tons of their steel products in warehouses as they are unable to sell the products due to economic recession in the country, a member of the association of Iranian steel producers said.

Following the decline in demands, have fallen as well, Reza Shahrestani told the Tasnim news agency Dec. 8.

Saying that the prices of steel products have fallen from 22000 ($0.73 according to Iranian Central Bank's official rate) to 12000 ($ 0.4) rials, he added that the current price is the lowest possible price and the producers cannot bear more decline.

In the meantime, larger producers have produced products but refrain from selling with the hopes that the prices will grow, Shahrestani said. He further added that some producers export their products at rock-bottom prices to prevent losing their global market share.

He explained that the cheap China-made products have caused the plunge in prices in the country.

Saying that about 20 percent of the country's required steel for one year has been kept in warehouses, he added that the country produces about 15 million ton of steel per year.

He predicted that the recession in steel market will intensify as the consumption of steel falls in winter in Iran.

In late November Shahrestani criticized a proposal for importing steel from India and said it will deliver a 'death blow' to Iran's steel industry.

Steel production rose by 6 percent and 6.6 percent in Iran in 2014 and 2013 and the country was the biggest producer of crude steel in the Middle East in 2013.