Indian steel companies grapple with sanctioned Iranian steel

Cheap steel imports from the Association of Southeast Asian Nations (ASEAN) have always been a problem for Indian steel companies, but Indian steelmakers are now worried about heavily discounted steel imports coming from Iran, a country that is under economic sanctions imposed by the United States.

It is expected that the first shipments from the Iranian port of Bandar Imam Khomeini will soon be delivered to Indian ports.

US sanctions are intended to dissuade allies from direct trade relations with Iran. Thus, to avoid import restrictions, import documents are processed through a third country.

According to some media reports, since December 2018, imports of sheet metal have been channeled through the UAE, otherwise it was a net importer, which increased almost fivefold to 65,000 tonnes.

The Economic Times reported that the Indian Steel Association (ISA), a representative body, wrote a letter to the Indian Steel Ministry requesting a ban on Iranian steel imports.

Indian steelmakers' contention was that the surge in steel imports was a result of the supply of steel from the AEO, which was actually produced in Iran.

Indian Steel Association ISA said that there has been a fivefold increase in steel shipments to India, which can be traced back to Iran. The ISA is currently concerned that if India continues to accept Iranian steel, it could face retaliation from the US for sanctions violations.

Steel exports from Iran have dropped significantly since the imposition of sanctions last year. Surprisingly, however, Iran's production grew by 8% in the 11 months to February 2019.

As noted by The Economic Times, ISA members, which include Tata Steel, JSW and Jindal Steel and Power Ltd., said Iran's overcapacity reached 36%, or 12.2 million tonnes (tons), although per capita consumption was down 14%. According to the report, about 30% of Iran's steel is exported to ASEAN countries.

The ISA says imports from the UAE increased 390%, calling the increase "alarming."

Iranian steel production, most of which is state-owned, produced 42.3 million tonnes of finished and semi-finished steel in the 11 months to February 19, Mehr news agency reported, noting an increase of 10.94% over the corresponding period last year. ,