Economy, Business And Markets

Lack of Funds Hurt Steel Industry

Lack of Funds Hurt Steel IndustryLack of Funds Hurt Steel Industry

The domestic steel industry has failed to achieve the 5-million-metric-ton increase in annual production set for the current Iranian calendar year (started March 21), said the chairman of the national association of metal suppliers.

Mohammad Azad blamed the lack of finances as the main reason behind the failure to increase the production of steel to the targeted point, saying that the total production this year (to end March 20, 2015) will not exceed last year’s figure, and will stand at 16 to 17 million metric tons.

According to, Azad said that currently the steel price at Iran’s market stands at around 17,000 rials per kilogram, adding that nearly all the steel products are being sold below the market prices. He warned that the domestic steel sector would experience more gloomy days if China, as a major steel exporter, continues with its dumping policy by selling cheap steel to the world. “We also expect the government to support the domestic producers through imposing protective tariffs on steel imports,” he asserted.

The unfair trade practices of Chinese companies and the inaction by the government here in Tehran is an issue long protested by the domestic steel manufacturers and unions. They say the officials should import tariffs of 25% for different types of girders, 35% for bundles of rebar, and up to 15% for billets and ingots.

A reduction in global steel prices and China’s huge inventory of steel products could, in the near future, fill Iran’s market to the brim with Chinese steel. In a stagnation-hit market, such a thing would bring even more misery for domestic steelmakers. Iranian steel manufacturers believe that steel prices have reached alarming levels and the rolling manufacturers, in particular, are threatened by the possible negative consequences.

Based on the 20-Year Vision Plan (2025), Iran should be able to produce at least 52 million metric tons of crude steels every year, while the current production hardly reaches 17 million metric tons per annum. Based on the Vision Plan, Iran should add at least 3 million metric tons of crude steel to its production capacity every year.