The Iranian Steel Producers Association (ISPA) has urged the minister of industry, mine, and trade to help put an end to the use of official-exchange currency for the import of steel products, Fooladnews reported.
In a letter to Mohammad-Reza Nematzadeh, the ISPA warned that if the government keeps allocating official exchange rates for the import of steel, domestic steelmakers will be left with no other option but to fold.
The ISPA said the dumping policies pursued by China and Russia in the global steel market have put tremendous pressure on steel manufacturers the world over.
The association also suggested the ministry limit the allocation of official exchange rate currency (which is usually 20% lower than the market rates) for the import of certain types of steel products such as hot-rolled sheets of thinner than 3mm, alloy sheets, and stainless steel sheets.
The allocation of official exchange rate currency is not the only serious problem facing domestic manufacturers. They have long been insisting that the administration should levy at least a 30% tariff on the import of steel products.
Steel manufacturers, who have been hit for two years by economic downturn in the housing sector, have so far held meetings with the officials at the ministry of industry, mine, and trade.
Domestic steel manufacturers propose import tariffs of 25% for different types of girders and beams, 35% for bundles of rebar, and up to 15% for billets and ingots.
“Despite 8 months of meetings, correspondence, and discussions with the ministry which led to partial agreement, the Trade Promotion Organization (TPO) has, on different occasions, published a long list of steel products for which the government allocates official exchange rate currency”, the ISPA letter read.
The ISPA claims the TPO has defied the minister’s order on two occasions during the past four months, arguing that the majority of the products for which the official exchange rate currency has been allocated, are abundantly manufactured at home.
In 2014, Iran, the biggest regional steelmaker, produced more than 16.3 million tons of crude steel and raised its ranking among the biggest steel producing countries from 15th to 14th.
The country also manufactured 16.5 million tons of steel products during the year, while it imported less than 7 million tons, according to deputy industry minister Ja’far Sarqini.
