Iran Steel Industry Booming despite Sanctions

Head of the Iranian Steel Producers Association (ISPA) Bahram Sobhani announced that Iran is capable of producing 25 million tons of steel in the current fiscal year (ends March 21, 2019) despite the US sanctions re-imposed against Tehran.

In the first 10 months of 2018, Iranian steel production rose to record 20.6 million tons making the country the world’s 11th biggest producer, the World Steel Association reported.

"This figure can rise to 25 million tons by the end of the current Persian year provided that the government puts its weight behind the push," Sobhani said.

He noted that about 9-10 million tons of the same amount can be exported if everything goes as planned and the government facilitates conditions for exports.

Iran’s steel exports are already facing an increasingly hostile terrain in Europe where the bloc’s executive body, the European Commission, has levied trade tariffs against Iranian products.

Iran's thriving steel industry is the target of US sanctions imposed in August and the growth shows the country's bid to keep expanding the industry is not a fluke.

Last month, the Trump administration announced sanctions on Mobarakeh Steel Company, the largest steel maker in the Middle East and North Africa and one of the largest industrial complexes operating in Iran.

Iran’s steel industry has been growing rapidly in recent years in line with the country’s ambitious plan to raise output to 55 million tons per year by 2015.

Last October, the European Union decided to hit hot-rolled steel from Iran with trade tariffs despite initial opposition to punitive measures by European governments.

The country, however, remains unfazed. In June, Iran launched commercial production of HR coils, steel sheet and ribbed sheet at Mobarakeh Steel Company, with a capacity of 1.6 million tons.

The opening of the new mill in central Isfahan offset a cut in sales of hot-rolled (HR) steel coils in the face of unilateral US sanctions.

It came as steel traders said that Russian steelmakers Severstal and MMK as well as ArcelorMittal Temirtau, a Kazakh unit of the world’s largest steelmaker, were cutting back their sales to Iran.

HR coil is used in the pipes and profiles segment, which is a large steel end-use sector in the country.

In January, Iran brought online its third steel plant which uses domestic technology for production of direct reduced iron (DRI) or sponge iron.

source: FARS News Agency