Iran has sought to boost the steel sector under its plan to increase non-oil revenues. It has succeeded in adding steel capacity which currently stands at 30 million tons a year, Press TV wrote.
“Iran will reach a production capacity of more than 52 million tons [per year] of steel in the near future,” Minister of Industry, Mine and Trade Alireza Razm-Hosseini said on Wednesday in his meeting with Iraqi Trade Minister Alla Ahmed Hassan in Tehran.
The country aims to export 20 to 25 million tons of steel annually by 2025 when it expects to hit the vision target of 55 million tons.
However, political and logistical hurdles are high and the sector has had to battle the headwinds of the most intensive US sanctions unleashed in May 2019 when Washington targeted Tehran’s export revenues from its industrial metals.
At the time, President Donald Trump put world nations on notice against allowing Iranian steel and other metals into their ports, saying it would no longer be tolerated.
Earlier this month, the US Treasury Department imposed sanctions on several companies in connection with Iran’s steel industry in a bid to dry up the resource-rich country’s sources of revenue.
A statement by the department said the US was targeting a China-based supplier of graphite electrodes, 12 Iranian metal producers and three foreign-based sales agents of a major Iranian metals and mining holding company.
The 12 Iranian steel manufacturers now designated by the US government have a combined annual output capacity that “reaches millions of metric tons of steel product,” the Treasury said.
The steel sector accounts for 10 percent of Iran’s export economy, but it is largely insulated from the effects of sanctions because it does not depend on foreign technology. Officials say that 100 percent of a steel mill can now be designed and built in the country.
Moreover, there is a buoyant domestic market where more than 50 industries in Iran are linked to the construction industry, which uses steel as a basic ingredient.
Steel is also the key component in Iran’s automotive industry, which is the largest in the Middle East and North Africa. Iran further has a massive oil and gas profile and a sprawling transportation and water supply network that feeds on its domestic metal industry.
Alternative to oil industry
Iran’s metals sector is emerging as an alternative source of revenue because the country’s mammoth oil industry is under a strict sanctions regime.
The US has imposed sanctions on almost all aspects of Iran’s economy targeting the construction, manufacturing, textiles, mining, aluminum, copper, iron and steel industries. However, it is much harder to sanction the mining industry because of its immense diversity.
Iran holds about seven percent of the world’s proven mineral reserves estimated at 60 billion tons, which include 68 types of minerals. At current rates, its mineral reserves are worth $700 billion, which could translate into $4 trillion of revenues in added value, according to Deputy Minister of Industry, Mine and Trade Mehdi Karbasian.
Razm-Hosseini on Wednesday touched on Iran’s $8 billion in metal exports as well as a 400,000-ton capacity established in copper production.
“Iran will reach a production capacity of more than 52 million tons of steel in the near future, while in the next four years it will be among the top 10 countries in copper production, and these capacities offer a suitable ground for deepening trade relations between Iran and Iraq,” he said.
Iran exported 35 percent more of its steel products in the Iranian month to December 20, 2020, compared to the similar month in 2019, a report indicates, as the country’s trade in lucrative metals starts rebounding after months of reduced activity due to the pandemic.
IRNA said in a report that steel exports had increased to over 721,000 tons for the month from November 21 to December 20, 2020.
The report studied exports by a total of 13 Iranian steel mills for a wide range of products, including ingots.
It said the surge in December had come against the backdrop of a fall recorded in exports year-on-year in the nine months to late December.
The 13 steel makers shipped more than 4.7 million tons of products over the nine month period, a reduction of 13 percent compared to the similar period in 2019, the study showed.
However, it said shipments had started to increase in volume in recent months amid a relative ease of restrictions imposed at borders in order to curb the spread of the coronavirus pandemic.
Steel billet exports from Iran surged by more than 500 percent in the month to late December, while mills continued to ship higher volumes of wires and patterned hot-rolled coils compared to the initial nine months of 2019.
The report said Iran would be able to maintain annual steel exports flat at 10 million tons for the year to March 2021.