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Iran aims to export between 20 and 25 million tons of steel annually by 2025.
Iran aims to export between 20 and 25 million tons of steel annually by 2025.

Iran to Challenge Europe on Steel Dumping Allegation

European steelmakers have recently accused their Iranian counterparts of dumping, after imports from Iran, especially hot-rolled coil shipments, grew by nearly eight times between 2013 and 2016
The prospect of Iran becoming a major steel exporter is disturbing European steelmakers

Iran to Challenge Europe on Steel Dumping Allegation

Iran has hired an attorney and plans to fight the European Steel Association’s allegations that the country is engaging in dumping practices in the continent, according to deputy minister of industries, mining and trade, Mehdi Karbasian.
"Iranian steel imports have become the latest threat to European steelmakers," the EU steel lobby group Eurofer said on Thursday, after imports from Iran, especially hot-rolled coil shipments, grew by nearly eight times between 2013 and 2016.
The hot-rolled coil market in Europe is worth about $11.1 billion. The key product is used in everything from auto manufacturing to construction and monopolized by companies like ArcelorMittal and ThyssenKrupp.
“We dismiss all allegations of dumping. There is no evidence to prove this claim,” he was quoted as saying by Mehr News Agency. 
He is also the head of Iranian Mines and Mining Industries Development and Renovation Organization–Iran’s largest state-owned mineral holding.
According to Eurofer, Iranian exports to Europe had leapt to just over 1 million tons annually, putting the country just behind India at 1.9 million tons, while China shipped 5.7 million tons in 2016.
According to Karbasian, the prospect of Iran becoming a major steel exporter and the global market recession is disturbing European steelmakers and prompting them to accuse Iran of engaging in dumping.
Iranian steelmakers exported more than 4.4 million tons of crude steel and steel products during the 10 months to January 19, registering a 45% growth compared with last year’s corresponding period. Iran’s main export destinations in Europe include Italy, Spain and Belgium.
"The threat from Iran is new and it's going to be one of the top three issues: China, India, Iran," Karl Tachelet, external relations and trade director at Eurofer, told Reuters. 
Eurofer’s members account for more than a quarter of EU iron and steel production.
Iran has sought to boost steel sector with help from foreign partners, as it targeted economic expansion following the 2015 deal to limit Iran's nuclear program in return for an easing of international economic sanctions. 
Iran aims to export between 20 and 25 million tons of steel annually by 2025 and increase total output capacity to 55 million tons from an estimated 16 million tons now.
The government plans to slap duties on the export of unprocessed iron ore, as India has done, which would make procurement of cheap feedstock for Iranian steelmakers easier.
Eurofer, which represents an industry that has to import its iron ore, says such a practice amounts to protectionism.
The European Commission has up until April to decide whether to impose anti-dumping duties for six months and 15 months to decide whether to apply “definitive” levies for five years.

 What Exactly Is Dumping?

Trade is war. No blood is shed, but there are markets to be conquered, allies to appease, enemies to hold back and however brutal the process, certain rules to uphold. Those who defy the rules of the game risk being alienated by both friend and foe, and left behind.
And in international trade, dumping is a heinous act beyond the pale. If proven guilty, a trade party could suffer high import tariffs on its goods or be even hit with an all-out ban.
Loosely defined, dumping is the export by a country or company of a product at a price that is lower in the foreign market than the price charged in the domestic market. 
As the practice usually involves substantial export volumes of the product, it often has the effect of endangering the financial viability of the products’ local manufacturers in the importing nation.
Dumping is legal under WTO rules, unless the foreign country can reliably show the negative effects of the exporting firm on the domestic producers. To counter dumping, most nations use tariffs and quotas to protect their domestic industry from the negative effects of predatory pricing.

 In Trade Begin Responsibilities

Iran has been a steel exporter for quite some time, but was never among the major global heavyweights. This is about to change, however, with the ambitious 2025 expansion program on the horizon, according to Bahador Ahramian, managing director of Yazd Rolling Mill Company.
“Things are changing course. Our inexperienced industry managers and officials are now entering global arenas and seen as major international exporters. We now have to play the game by the rules and watch out for the consequences of our domestic trade policies,” Ahramian, who is also a member of Iran Steel Producers and Exporters Association, told the Financial Tribune via telephone.
The industry official believes that the government’s intention to limit iron ore exports to feed domestic mills has spooked European steelmakers.
The Iranian government plans to slap 5-15% stepwise duties over a three-year period on the exports of a number of unprocessed minerals, including iron ore, as of next fiscal year (to start March 20, 2017).
“Any direct governmental support of the steel industry can be potentially regarded by international players as subsidizing the sector. And in a free market economy, this is seen as a form of rent-seeking,” he said.
"The country’s domestic trade policies must be devised with an eye to their impact on exports."
According to the managing director, this is an early warning for the industry. 
If the EU goes through with the dumping allegation and is able to prove the case, many more countries seeking to protect their markets might come forward and demand the same.
However, Ahramian noted that Iranian steel exports to the EU do not meet the definition of dumping, as the main cause of Iran’s low steel prices is the country’s competitive energy costs, which applies evenly across all industries and not just the steel sector.

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