How Iran’s steel industry performs in post-sanctions era?
Baku, Azerbaijan, Nov. 23
By Farhad Daneshvar – Trend:
Iran’s steel industry seems to witness a partial boost after the implementation of the Joint Comprehensive Plan of Action (JCPOA/nuclear deal) on Jan. 16, which was followed by the removal of a part of international sanctions on the Islamic Republic.
Although the volume of output and exports of Iranian steel producers have considerably increased over the past several months, the country’s steel plants continue to operate below their full production capacity, head of Tehran Iron and Steel Union, Mohammad Azad told Trend.
Azad said the volume of production and exports has increased but the level of domestic consumption does not satisfy the expectations, so far.
According to the latest statistics, the Islamic Republic exported 1.99 million tons of crude steel as well as 1.296 million tons of steel products over the first seven months of the current Iranian year which started March 20. The figures indicate 103 percent and 5 percent rise, respectively, year-on-year.
The country, however, imported 150 tons of crude steel (a 299-percent increase) and 1.807 million tons of steel products (a 18-percent fall) in the same period.
Mohammad Azad noted that a group of steel plants in Iran have reduced the number of their shifts to one while they are capable of operating on two and even three shifts.
He added that in case the obstacles to production are removed the Iranian producers can easily boost their level of production.
Although some problems regarding banking transactions have been resolved following the implementation of the nuclear deal, a group of leading banks still avoid carrying out financial transactions for Iran, which has a negative impact on the country’s steel industry, he said.
On the other hand, Iran’s rivals offer their products at lower prices, as a result of which the Islamic Republic lost a part of its global market share, though the Iranian products enjoy higher quality, the official believes.
He described China as Iran’s main rival in steel market, saying that the Chinese steel producers account for almost half of the world’s steel output.
World crude steel production for the 66 countries reporting to the World Steel Association stood at 1.333 billion tons over the first 10 months of the current year with China producing 672.96 million tons of steel.
Iran was the world’s 14th biggest producer of steel in the 10-month period. The country also ranked first among the Middle East countries.
Elaborating on ways for helping the country’s steel industry, Mohammad Azad called on the government to give support for producers.