Despite 10-20% tariffs imposed on the import of steel products, domestic steel manufacturers still suffer from steel dumping by China and Russia, according to secretary of the Iranian Steel Producers Associations, Rasoul Khalifeh Soltan.
He noted that other countries in the Middle East have adopted antidumping measures to stem damage to their markets.
“For example, Turkey has banned the import of hot-rolled rebars from China, France, Romania, Japan, Russia, Ukraine and Slovakia since January as an anti-dumping measure,” IRNA quoted him as saying.
In the wake of the global crisis in the steel sector, a number of large steelmakers from China and Russia resorted to dumping their low-quality finished or semi-finished steel products in other countries’ markets at low prices.
Last February, the ISPA warned the Ministry of Industries, Mines and Trade that allocating foreign currency at official exchange rate (which is normally 20% below market exchange rates) for importing steel products would harm the domestic industry, leading to closure of many small steel plants.
The ministry finally decided to limit the allocation of official hard currency to some steel products, including thin steel sheets below 3 millimeters and stainless steel alloys and sheets. The decision also imposed import tariffs of 10-20% on various steel products.
However, ISPA Chairman Bahram Sobhani believes imposing 10-20% tariff is not enough to prevent the excessive steel imports.
“The imposed tariffs are not effective as they are compensated by the global decline in steel prices,” he said, suggesting that a tariff of at least 30% be imposed to combat steel dumping.
Deputy industries minister, Jafar Sarqini, had earlier announced that between 5 and 7 million tons of steel products are imported annually.
The sharp decline in global steel prices over the past few months have left most domestic steelmakers unable to compete in the global markets. Low domestic and regional demand has also added to the problems of domestic steel manufacturers.
On the one hand, an unprecedented downturn in domestic housing and construction sectors has considerably reduced demand for steel sections such as reinforcing bars and girders. On the other, instability in the region’s political and security atmosphere has led to decreased demand.
For example, according to steel market analysts, Saudi Arabia had many construction and infrastructure projects in the pipeline but the war in Yemen has caused many such projects to be either cancelled or postponed.
Iraq, as another example, used to import enormous amounts of steel from Iran but terrorism has considerably reduced the country’s import of construction materials such as steel and cement.
In order to survive, many Iranian steel companies have received loans at high interest rates of up to 30%, which they are now unable to repay.
While the administration cannot change the situation in international and regional markets, experts expect it to protect domestic steel manufacturers by imposing protective tariffs and confronting the dumping policies of some foreign countries.
