Iranian metallurgical industry: results and prospects

According to ISA, in 2019 Iran was ranked 10th among the world's steel-producing countries, while in 2016 Iran was ranked 14th.

In fact, Iran is the largest steel producer in the region. According to the comprehensive steel plan, the country plans to produce up to 55 million tons of crude steel by 2025.

Some neighboring countries also plan to produce some crude steel until 2030 and 2040. Saudi Arabia, Oman and Qatar are among those countries that intend to raise production levels, but none of them can reach Iran's target of 55 million tons, which is a really large number.

Iran has been subject to huge sanctions. The first round of US sanctions was imposed on August 6, 2018, and the second round took place on November 4 of the same year. The sanctions were gradually tightened in 2019, that is, some amendments were made to the sanctions and new Iranian companies were enlisted. The final list of sanctioned Iranian companies was released on January 20, 2020. For a year and a half, the Iranian metallurgical sector came under sanctions.

However, Iranian steelmakers have learned to cope with sanctions. They applied several methods in this regard, so that Iran's steel exports increased over the previous year. This proves that, despite the US-led sanctions, Iran's steel exports could rise significantly.

Iran plans to increase capacity and production levels to over 55 million tonnes per year by 2025. But there is some controversy as to when we talk about the ability to produce 55 million tons, the real production level will be 10 to 15 percent less than the announced figure. I believe that reaching the target of 55 million tonnes would be enough to avoid shortages of raw materials or processed products.

Overall, the first quarter was not good for the steel industry globally, and most market analysts, myself included, think the steel market will remain slow in the second quarter as well. The market is expected to have a chance of recovery from the second quarter.

Iran's steel sector has also suffered in the same way as the sector in China and other global markets. When the market is slow, it is obvious that the export of any commodity, including steel, will be difficult.