Economy, Domestic Economy

Zero Hour for Steel Industry

Zero Hour for Steel IndustryZero Hour for Steel Industry

Throughout history, the path to industrialization has been paved with steel, and Iran, as a country with an emerging economy in need of bolstering its industries, has put the development of the steel sector on top of its agenda.

In recent years, Iran’s steel industry has been hit with many blows from both the global and the domestic front.

The relentless pace of plummeting global steel and iron ore prices, shrinking worldwide demand and the emergence of China, a goliath and an industrial nemesis for every steelmaker around the world, has prevented Iran’s steel producers from exporting their products.

This has reduced the scope of their business in domestic market–itself reeling from a slump in the construction sector.

But the landscape is changing. The lifting of economic sanctions imposed on Iran over its nuclear energy program, as part of the July 14 nuclear accord reached with six major world powers, has eventually opened the country’s economic sectors to the world.

Foreign business delegations have wasted no time to visit Iran ever since to tap the emerging opportunities. That said, key industrial sectors, including the steel industry, are expected to be the first to benefit and be revitalized.

  Most Prestigious Steel Event

At this turning point for Iran and the steel industry, the world’s steel giants are scheduled to gather in Tehran to attend the Middle East’s largest and most prestigious steel convention, the Sixth Iranian Steel Market Conference (ISMC 2016), hosted by Financial Tribune’s sister newspaper, Donya-e-Eqtesad, on February 16-17.

Steel market analysts, metal investors, steel suppliers and major producers from the United States, China, Italy, Germany, Spain, Austria, the United Kingdom, Russia and France will attend the conference.

Top officials from Iranian industries and large-cap domestic steelmakers will analyze the current global situation for the steel industry, identify Iran’s potential in the sector and address its bottlenecks.

Foreign participants include Peter F. Marcus, the founder of World Steel Dynamics and a world-leading figure in steel securities analysis; Yang Zunqing, deputy head of China Iron and Steel Association; Ginapietro Benedetti, CEO of Italian Danieli Group; Burkhard Dahmen, CEO of German SMS Group; Tae-Hyun Hwang, CEO of the South Korean POSCO; Elias Gonzalez Gil, managing director of Spain’s Sarralle; and Roland Kristl, CEO of Austrian INTECO to name a few.

Iran’s key steel industry players will also be present at the conference, including Mehdi Karbasian, deputy minister of industries, mining and trade, and the head of Iranian Mines and Mining Industries Development and Renovation Organization; Mohsen Pourseyyed Aqaei, deputy minister of roads and urban development and managing director of Islamic Republic of Iran Railways; Bahram Sobhani, managing director of Mobarakeh Steel Company; Jafar Sargheyni, deputy minister of industries, mining and trade; Qadir Qiafe, chairman of Iran Iron Ore Producers Association.

Those who are interested in the conference may visit for more information.

  Steel Outlook

The domestic steel sector is poised to grow substantially in the post-sanctions era, as many international companies have either already consolidated their foothold in the country or are in the race to sign deals.

During President Hassan Rouhani’s January visit to Italy–the first such visit to Europe following the removal of sanctions–Danieli Group signed deals worth $6.2 billion with IMIDRO, to expand and develop Iran’s steel and aluminum sectors.

The deal entails establishing the joint “Persian Metallics” company in Iran and supplying a number of Iranian steel and aluminum companies with cutting-edge machinery and production equipment.

Based on the 20-Year Vision Plan (2005-25), Iran aims to produce 55 million tons of steel per year, which in turn requires the annual production of nearly 77 million tons of iron ore concentrate and 72 million tons of pellets.

Persian Metallics is set to produce about 6 million tons of pellets annually, which will not only feed Iran’s steel mills and help the country achieve the envisioned figures, but it will also help reduce reliance on pellet imports.

Close to 2 million tons of pellets were imported during the previous Iranian year (ended March 20, 2015).

Moreover, the French Fives Group, which also signed an aluminum cooperation deal with IMIDRO during the visit, has recently announced plans to enter Iran’s steel market.

“Iran’s steel market is huge and has considerable potential for development,” said Fives Group’s representative in Iran, Aydin Hashemi, adding that the company’s expertise in stainless steel and silicon steel production can substantially help Iran’s industry, Minews reported.

Hashemi noted that “fruitful talks” have been held with Iranian officials and that Fives Group is ready to cooperate with Iran in providing it with steel production technologies and in financing steel projects.

Located in over 30 countries and with nearly 8,000 employees, Fives designs and supplies machinery, processing equipment and production lines in the aluminum, steel, glass, automotive, aerospace, logistics, cement, energy and sugar sectors.

Gruppo Pedercini Company, which was part of the Italian trade delegation that visited Iran last week, announced that it is going to cooperate with Iranian firms in the production of steel pipes and provision of machinery.

“Investment in Iran is highly beneficial for both Iran and Italy. Iran can expand its industries, diversify its portfolio and increase its non-oil revenues by increasing exports, while Italy will find a trustable trade partner,” said Claudio Pedercini, the CEO of the company.

Iran produced 16.1 million tons of crude steel in 2015 to become the world’s 14th largest steelmaker.