US Sanction: Iranian Steel Exporters will Maintain their Presence in the Market

In a recent interview with Mr. Mehdi Sarlak, Manager of Marketing Eshfahan Steel Company, SteelMint learned about Iranian steel industry and about Eshfahan steel company, one of the largest steel company of Iran.

How do you see the condition in Iranian steel market?

It has been reported by the National Bureau of Statistics that the average price of each square meter in Tehran province has risen by nearly 12% in the last couple of months. This is good news for the upstream industry like steel. Depreciating of IRR against USD is another factor supporting the domestic prices. Producers are very much stimulated to sell their material abroad since the IRR has depreciated significantly in the last few months. So, I think in the short term Iranian steel market would be strong.

What is the situation of ESCO both in-house and abroad?

We have been able to obtain new certifications, and hence, our export markets have expanded. UK CARES is one of the certificates which enabled us to export our rebar for the first time in the history to England; a mission no other Iranian companies were able to fulfill. There has been very good feedbacks on buyers' side and we are planning to fortify our position in the future. ESCO, as the bigger member of Iranian long steel producer, has tried to give more space to smaller re-rollers that are mainly active in the domestic market and based its sales on export. Last year, we exported more than 50% of our production to 14 countries across the globe, more than 50% growth compared to a year earlier. Our plan for 1397 is 2.8 million tons production, out of which we intend to export half.

How do you think the US sanctions will affect Iranian steel industry in the future?

Today, Iran has turned into a net exporter of steel, while the country was a complete importer just some years ago. This shows two things: first, Iran has done a very good job in the capacity expansion projects and second, Iranian steel has sown itself to the market as a trusted brand. This transformation just happened in the years where Iran was sanctioned by the world community. Why this happened? Because Iran set the path for the buyers to source steel with competitive price other than monopoles in the region. Despite Chinese presence in the market, Iranian exporters managed to capture their share. Now, with President Trump sanctioning trades with Iran in 3 month, I don't think buyers of Iranian steel would want to lose excellent quality steel at a very competitive price. So, I guess Iranian steel exporters will maintain their presence in the market, though it might be a bit more difficult.

Inputs taken from Planner