Europe needs to adopt new monetary policies to deal with Iran (Exclusive)

Business Materials 13 June 2018 10:43 (UTC +04:00)

Tehran, Iran, June 13

By Kamyar Eghbalnejad - Trend:

European nations need to adopt new monetary policies in order to be able to continue their trade with the Islamic Republic, the head of Tehran Iron and Steel Union told Trend.

“I think Europeans should change their monetary and financial policies in a way that they could continue their trade with Iran in the steel sector, without being worried about the new US sanctions,” Mohammad Azad said.

He added that the European countries need more time to make up their mind, noting that their withdrawal from Iran’s market would give them a rough ride back home.

Referring to a decision by Italian steel manufacturer Danieli to halt work on finding financial coverage for orders it won in Iran, worth 1.5 billion euros ($1.8 billion), Azad said Danieli walked away from two projects in Iran following the US withdrawal from the 2015 Iran nuclear deal.

He added that now domestic companies, despite shortages in technology and equipment, are developing the projects.

In 2016, Danieli signed a framework commercial agreement with Iran worth about $5.7 billion.

Azad said a total of 23 million tons of steel was produced in Iran last year from which 9 million tons were exported.

Iran needs to maintain its presence in the global steel market to contain unemployment, he said.

“At this juncture, downstream companies need more attention than upstream firms,” Azad said.

“Major steel manufacturers should keep an eye on the domestic market and meet its demand before trying to export their crude steel,” the head of Tehran Iron and Steel Union concluded.

Steel is the second biggest industry in the world after oil and gas. The commodity was Iran's largest export item after oil, gas and petrochemicals last year, partly because of the slump in domestic construction.

Iran enjoys an advantage because production costs at the majority of its steelworks are internationally competitive because of low energy prices in the country.

Steel is a strategic commodity for the country of 80 million, which has the Middle East’s biggest carmaker. It is also key to the country's massive oil and gas industry, transportation network, water supply, urban centers and mammoth construction sector.