Economy, Business And Markets

Setting the Stage for ISMC 2016

Business & Markets Desk
Setting the Stage  for ISMC 2016
Setting the Stage  for ISMC 2016

It is a rough time for Iran's steel industry as it is grappling with low domestic demand, shortage of liquidity, high production costs and the unwelcome imports of low-quality Chinese steel products in the market.

According to experts, Iran's steel industry has historically gone through recurring periods of recession every 10 years, in which production costs skyrocket and domestic demand goes into a nosedive. To overcome this critical situation, there needs to be an exchange of thoughts among industry players, experts, government officials and foreign companies.

The 6th Iranian Steel Market Conference (ISMC 2016), scheduled to be held in Tehran on February 16-17, 2016, exactly serves that end. Top officials from Iranian industries, major domestic steel producers as well as global steel giants from Spain, Italy and Germany are set to attend the annual conference, which is hosted by the Financial Tribune's sister newspaper Donya-e-Eqtesad.

Foreign participants who attended last year’s conference include Italian Danieli, one of the world’s largest suppliers of equipment and plants in the metal industry; the German SMS Group, a global leader in plant and mechanical construction for metallurgical process chain; and the Spanish Sarralle, specialized in engineering, design and manufacture of heavy equipment.

Peter F. Marcus, managing partner of World Steel Dynamics for strategic information service and a steel securities analyst, will also be present at the conference besides Yang Yongliang, the managing director of China’s Umetal.

In preparation for the upcoming event, Donya-e-Eqtesad invited industrial experts and government officials for a meeting at its headquarters in Tehran on Sunday.

According to Mohsen Parvan, the conference manager, the main objectives of ISMC 2016 are as follows:

- Reviewing the state of ongoing steel projects and the Comprehensive Steel Plan (which sets the target of increasing annual steel production to 55 million tons by 2025 as per the 20-Year National Vision Plan);

- Forecasting the steel and iron ore markets in the upcoming Iranian year (March 2016-17);

- Reviewing the challenges ahead of steel producers amid recession;

- Finding solutions to tackle recession in the steel market.

According to statistics by Donya-e-Eqtesad Market Studies Unit, China only exported a meager amount of 1.6 million tons of steel in 2010 before the figure skyrocketed to 92.9 million tons in 2014. The exports are expected to exceed 150 million by the end of 2015. The implications for the global steel industry and especially Iran are serious.

However, according to Ali Shekarriz, former CEO of Iran National Steel Company, Iran can stand up to this trend.

“One of Iran’s main advantages over China is its great potential in the production of semi-finished products such as iron billet. Currently, 50,000 tons of iron billets are exported to Saudi Arabia every month, and Mobarakeh Steel Company is a well-known brand both in the region and globally. We can prosper in foreign markets, if we achieve consistent growth and determine our export markets,” he said, adding that the upcoming conference presents a great opportunity to achieve this.

Another speaker at Sunday’s meeting, former CEO of Mobarakeh Steel Company, Mahmoud Eslamian, said: “Increasing exports is the only way out of recession. However, we are currently selling our products way below the actual finished prices.” Eslamian noted that the issue of import tariffs must be paid special attention during the conference.

Former deputy industries minister Ahmad Doust-Hosseini, called on the government to consider the effects of the fluctuations in foreign exchange rates, energy prices and interest rates on the steel industry.

“The steel sector has always been seen by the government as a domestic industry with limited domestic objectives. Now, there is a need to look beyond our borders and focus on exports,” he said.

CEO of Mobarakeh Steel Company, Bahram Sobhani, hoped that the domestic steel industry will soon be back on track, stressing that now is the best time for attracting foreign investment.

“According to statistics, the global steel market will enlarge from 1.6 billion to 2 billion tons by the end of the National Vision Plan in 2025, which is a great opportunity to boost our exports,” he said, noting that Iran’s steel industry is blessed with cheap energy prices.

The Sunday meeting was concluded by the head of Iranian Mines and Mining Industries Development and Renovation Organization, Mehdi Karbasian, who is scheduled to deliver an address at the February conference alongside the Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh.

Karbasian praised Donya-e-Eqtesad for bringing industrial experts and managers together and said the conference would help the government tackle the issues holding back the steel industry.

“The timing of the conference could not be any better as it comes amid the new economic climate as a result of the lifting of sanctions on the one hand and the approval of the next fiscal year’s budget on the other,” said Karbasian, who is also deputy minister of industries, mining and trade.

The 5th edition of Iranian Steel Market Conference was held in Tehran on January 27, 2015, and was hailed by industrial experts and officials as one of the most important and prominent steel conferences in the region.