Will Iran and Turkey New Agreement Increase Steel Trade?

Iran and Turkey have recently signed a new contract to eliminate USD in trades between the two countries in order to lower the effects of sanctions.

According to the new deal, Iranian Rial and Turkey Lira will be mutually transferable in contracts between the buyers and suppliers and intends to hike the volume of trade from the current USD 10 billion to USD 30 billion.

Although Iranian billet exporters may benefit from such deal, it is very much unlikely that they could heighten the trade volume since there are still other challenges in place. The lengthy delivery time as well as lack of regular sea lines between Iran and Turkey are few of the major challenges faced by both the countries.

Turkish buyers have decreased billet import even from CIS and try to source their need locally due to low raw material prices and the weakening of Lira against USD. So, it is not very likely to consider Iran as a long-term supplier and a replacement for CIS region.
Such trade contracts are currently in place between Iran and a number of other countries like Russia, South Korea as well as India.

Turkey has imported around 2.85 MnT of Billet in CY'17(Till Aug'17), Major exporters were Russia, Ukraine, Brazil and Iran.
During two months period Aug-Sept'17, Iran exported total 521,000 MT bulk Billet. UAE imported highest 104,500 MT bulk Billets from Iran occupying 20% share of total bulk Billet exports followed by other major importers Oman (82,500 MT), Indonesia (70,000 MT), Thailand (45,000 MT) and Sudan (35,000 MT) respectively.
India imported 10,000 MT bulk Billet from Iran in Aug'17.

Source: Inputs Taken from Planner, SteelMint Research