Economy, Business And Markets

Steel Industry Woes Raise Alarms

Steel Industry Woes Raise Alarms
Steel Industry Woes Raise Alarms

Despite the cessation of steel imports, prices have not changed in the domestic market as there is little desire for an increase in purchases.

Last week, Esfahan Steel Company managed to sell 6,000 tons of ingots at 15550 rials ($0.58) per kilogram, but analysts say the company was in fact bartering for raw material. This is   while, the products by the same company were available in large volumes in the market at lower prices but with no customers.

With the falling price of scrap metal, the market expects ingot prices to drop and that is the reason behind the lack of demand for ingots at the present time.

Demand in the market for iron rods is also very low and that is most probably because of a downturn in construction and recession in real-estate and housing markets.

Overall, many steel manufacturing units, especially the smaller ones, are grappling with numerous problems. Market analysts say if the current situation persists and the government does not help the steel industry with practical solutions, many steel manufacturers will face bankruptcy. The government would not tolerate such potential disaster.

After all, based on the projections in the Fifth Five-year Economic Development Plan (2011-2015), national steel production should reach 55 million tons per annum, which is unlikely to materialize regarding the current production level, which hardly reaches 20 million tons per year.