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Steelmakers sponsor suppliers


The first National Conference and Exhibition of Iran Steel, to be held in the capital’s Milad Tower  (January 7-10, 2019), aims to familiarize steelmakers with the country’s domestic potential, said Dr. Bahram Sobhani, the head of Iran’s Steel Producers Association.
Dr. Sobhani told a news conference that Iran has reached self-sufficiency when it comes to technology and equipment. “Without a doubt, the country can handle from A to Z of what is needed for building and running steel plants.”
He said the national event [in early 2019] will differ in nature from other specialized gatherings, adding the exhibition is designed to help supplying companies – which are involved in the development of the steel industry such as suppliers of consumables and equipment – display their own capabilities.
“We are seeking to launch a database for steelmakers and establish a communications link between steelmakers and suppliers,” he said, adding companies and investors are expected to opt for domestic products.
Dr. Sobhani went on to say those who have gone the extra mile to help shore up the steel industry will be truly appreciated.
National Steel Day to be put on calendar 
Dr. Sobhani said, “We have put forward a proposal to designate a day as National Steel Day on Iranian calendar,” adding this is a common practice in other countries to dedicate a red-letter day to industry giants. 
On the industry’s achievements in the eight months to November 21, 2018, he said the country has produced 14.232 million tons of steel products and rolls in that period, up 10 percent over similar period a year earlier. “Production of rebar has posted the highest increase (22 percent) in the eight-month period. As for billets and blooms, production has registered 23 percent growth (9.258 million tons). Production of slaps has grown by 11 percent, standing at 7.382 million tons.”
Dr. Sobhani then touched on the question of foreign trade and expressed hope steelmakers will be able to build on their prudent measures to undo the sanctions and boost their exports. “The steel industry has a surplus of 8 to 10 million tons this year (which ends in late March 2019). Production will take a beating in different units across the country if appropriate measures are not taken soon. It is a great honor to tout that the country has surplus products and is now one of the key exporters in the region.”
Production should grow in non-security atmosphere
Dr. Sobhani further said the growing steel demand in the market in recent months was not genuine, adding the government consequently imposed some restrictions on steel stocks offered on the exchange. “The Steel Producers Association held meetings with the Ministry of Industry, Mines and Trade to remove such restrictions. We believe domestic restrictions make no sense at a time when the country is in the grip of sanctions. Such restrictions at home should become history.”
He further said the circulars issued were aimed at underplaying the role of middlemen to the benefit of end users, but in practice, consumers did not benefit from them. “The circulars come with some challenges. Production should be handled at an atmosphere which is free from security concerns.”
Natural gas gives the steel industry an advantage, he said. “Policymakers should avoid measures – such as raising gas prices – which may rattle the steel industry and scare away investors. In recent years the government has stressed the need for abandoning natural gas sales and opting for higher added value exports. That’s why construction of a plant in Lamerd, Fars Province to produce sponge iron came up for discussion.”
Dr. Sobhani said in the first eight months of this year in which the industry faced no export restrictions at home and abroad, the country exported as much as five million tons of steel products. “Iran’s steel exports would have hit 8.7 million tons by yearend ($5.3 billion) if restrictions had not been in place.”
Balance between steelmakers’ revenues, costs
Sobhani said each ton of steel products costs $120. “The hard currency earned from steel exports is channeled into the Integrated System for Hard Currency Transactions, known as NIMA. There is a balance between the steel industry’s imports and revenues in foreign exchange. In other words, the steel industry whose forex revenues stand at $3 billion needs $3billion in hard currency to handle its imports.”
Steel exports have brought in no more than $5.3 billion, he said, adding there are speculations that the steel sector revenues surpass $5.3 billion and the local industry has failed to offer its hard currency in NIMA system. “The fact of the matter is that steelmakers register the hard currency they collect from their exports so that they can pay for items they need such as electrodes.”
Sobhani went on to say that light had been shed on measures to bring into the country the hard currency the steel industry gains from its exports.     
Steelmakers sponsor suppliers
In the same news conference, the secretary of the Steel Producers Association said that Iran ranks tenth in the world in terms of steel production.
Rasoul Khalifeh Soltani, who is also the secretary of the first National Conference and Exhibition of Iran Steel, further said the steel industry’s vividness shows the huge potential of Iran’s mining industry. “Steel has high potential, too, and comes only after oil and petrochemistry.”             
He further said, “We need to remove the challenges standing in the way of supplying raw material, parts and equipment and identify the leading companies which are involved in supplying these items.”
In the first National Conference and Exhibition of Iran Steel, steelmakers will play the role of sponsors who support supplying companies and accept the risks associated with their products to some extent, he said.
Negative export growth is disastrous; steel market glutted with surplus goods
The vice-president of Iran Steel Producers Association told the same news conference that turbulence in the foreign exchange market was the most significant event that unfolded in Iran this past year; as a result the government got involved in running the affairs of different sectors.
Bahador Ahramian said, “The government’s involvement in the affairs of the steel sector was not necessary because the sector faced no difficulty meeting domestic demand and there was a glut of products on the market.”
He went on to say the previous round of sanctions turned Iran into the world’s second largest steel importer. “Due to sanctions, Iran imported as much as 11 million tons of steel. But now the country has a surplus. If the current negative trend of exports persists, the country will be in for a disaster for which ambiguities and toothless legislation are to blame.”
He said sanctions will push down Iran’s steel price and this will tighten the economic noose around the neck of Iranian steelmakers.
Domestic, foreign investment in steel industry             
Later Reza Shahrestani, a member of the board of Iran Steel Producers Association, said the country needs $20 billion in investment to raise its current production capacity to 55 million tons by 2025.
He further said enormous investment should be funneled into the country’s infrastructure. “We need to work out plans for exporting as much as 25 million tons of steel as envisioned in the 2025 Outlook Plan. This in turn calls for considerable investment in rail and maritime transport infrastructure. Overall, the country needs $50 billion in capital, of which $20 billion will be provided domestically and the remainder should come through foreign investment.


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