Economy, Business And Markets

Steel Demand at All-Time Low

Steel Demand at All-Time LowSteel Demand at All-Time Low

The global recession and a significant decline in the steel sector have prompted many producers to sell way below the finished price, says managing director of Metals and Materials Company, Farshid Soltanzadeh.

According to the industrial expert, various factors have affected the global steel demand, including after-effects of Greece’s financial crisis, lack of growth in the US economy and serious difficulties in China’s capital market.

“Investments in iron ore mines were highly profitable during the previous decade and this caused markets to be saturated with iron ore. However, the global recession significantly lowered demand for these products, and consequently, prices plummeted. For instance, Persian Gulf’s billet prices dropped by 35% last year and reached less than $340 per tons,” Eghtesad News quoted Soltanzadeh as saying.

“The domestic steel market is faring no better. Although Iran is not seriously affected by the global economy due to its limited foreign trade ties, the country’s steel-consuming industries are currently experiencing stagnation and demand for steel is at an all-time low,” Soltanzadeh said.

Advisor to first vice president, Mostafa Moazzenzadeh, also echoed the views and said the government must stop investment in uneconomical steel factories with less than 20% progress.

Referring to President Hassan Rouhani’s remarks during a televised interview on Tuesday about injecting $2.49 billion to quick return development projects in the coming weeks, the official said implementation of these projects will increase demand for steel products and stimulate the market.

Moazzenzadeh noted that based on the 20-Year National Vision Plan (2005-25), steel production is expected to reach 55 million tons per year and the country does not need steel factories to realize this figure.