Over the period of the international blockade, Iran's steel market has steeply contracted as the economy ran out of necessary investments. As a result, not all local steelmakers positioned themselves for a steady expansion, as capacity utilization at some private mills was less than 40%. The only bright spot was growing steel exports at the state-owned steel giants, like Mobarakeh Steel Company and Khouzestan Steel Company, and, to some extent, the implementation of several mining and DRI-projects by the IMIDRO members. But those days are almost gone!
The approaching removal of sanctions will, first of all, open up new opportunities for Iran's exporters, especially from the private sector. The country is likely to meet the export targets set for the current Iranian year (4 million t), as in the first 6 months it sold 1.8 million t. Iran set a goal to export around 10 million t of steel products for the long-term perspective. In fact, local producers are already busy trying to meet the needs of the foreign customers by increasing production capacities, diversifying production portfolio and introducing competitive prices, which means Iran’s export potential is yet to be unleashed.
A huge stimulus of opening economy is going, though not immediately, to revitalize domestic consumption in Iran for different kinds of steel goods, from rebar to rails, flat products and pipes. The economic freedom will gradually let unfreeze construction and infrastructure development projects, expand oil and gas pipelines, automotive sector and shipbuilding.
As for imports, high value added products will be in greater demand in Iran amid the country’s growing economy.
