Dumping of cheap steel by China is threatening Iran's steel industry and can cause irreparable damage if not dealt with promptly, warned the deputy chairman of the Iranian Steel Producers Association (ISPA), Hamid-Reza Taherizadeh.
"The global steel market is currently experiencing recession and domestic steelmakers, especially in the private sector, are suffering enormous pressure. In such circumstances, government officials should be very careful about China' moves in global steel markets," said Taherizadeh in an interview with Fooladnews.
The ISPA official further noted that China’s contractionary policy towards steel production “is a crucial issue, as China is capable of bringing steel prices down to $250 per metric ton considering the sharp declines in global iron ore prices.”
The official’s warning comes as Iran’s steel market has been witnessing sharp decline in steel consumption over the past year and the prices of steel products in the domestic markets have fallen by as much as 80 percent. Private steelmakers, having lost their profit margin due to cheap imports, repeatedly call on the government to impose reasonable tariffs on import of steel products.
Observing that in light of recent declines in Russian, Turkish, and Ukrainian currency and the global decline in iron ore prices, Iran is seen by China as a desirable market for export of steel products, Taherizadeh called for imposing higher tariffs on imports from China to protect the domestic steel manufacturers.
He also said the fact that Turkey and the US have imposed 40% and 100% tariffs respectively on import of steel products from China indicates that these countries have realized the importance of anti-dumping measures and suggested that Iran must follow suit.
“Domestic steel producers have been regularly contacting the ministry of industry, mine, and trade over the past three months to convince the officials to accelerate the process of imposing higher tariffs on Chinese steel products,” Taherizadeh added.
According to Taherizadeh, following the announcements by government officials regarding imposition of higher tariffs on Chinese steel, many Iranian importers have already placed orders for importing large quantities of steel from China. The steelmakers now fear that if imposition of tariffs by the government is delayed due to formalities, large quantities of Chinese steel will flood the markets.
The ISPA member also criticized the seven provincial steel projects (launched by former president Mahmoud Ahmadinejad in 2006) for their wrong choice of location, saying: “The provincial steel projects face a multitude of problems including transportation, water, and energy. For instance, transporting iron ore pellets to the steel plant in the northwestern province of East Azarbaijan is very costly. The officials should have consulted experienced advisors before selecting the project sites.”
The previous administration has been strongly criticized for locating steel projects in regions faced with serious water shortages. This is while the remaining projects, which were suitably located, later faced problems due to climate change.
