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Transparent performance of MSC as for attention to local market
Mobarakeh Steel Company (MSC) views efforts to play a pivotal role in the industrial development drive of the nation and to meet local needs as its core responsibility, but in acting in line with the principles of the Resistance-based Economy, the instructions of the Supreme Leader, and the policies of the esteemed government it has tried to have a constant presence on export markets. Since its foundation, MSC has tried to maintain and bolster its overseas presence by exporting part of its products. Given the expansion projects of the steel industry as part of a 2025 Outlook, MSC regards continued presence on export markets as a must.    
Ever since its launch, Mobarakeh Steel Company has sold more than 91 million tons of products, 19 percent of which has found its way into global markets. The revenues the company has earned from exports have propelled expansion projects, raising the steel behemoth’s output from 2.4 million tons to 10.3 million tons.
In light of the policies and support of the esteemed government, the amount of steel products MSC sent to the local market in the 12 months to March 20, 2017 posted 42 percent growth over the year before. In the first half of the current year, too, the volume was 34 percent up in comparison with the corresponding period last year. Despite an improvement in the business environment and a rise in consumption, as a result of this effective measure by MSC, steel sheet imports fell from 3.7 million tons in the 12 months to March 20, 2016 to 2.8 million tons a year later. The rise in supply of steel products to the local market by MSC and other steelmakers is predicted to see imports register an additional 40 percent decrease this year [ends March 20, 2018]. This shows that the steel industry policies are geared toward shoring up the Resistance-based Economy.
Following the release of a number of reports on Iran’s steel exports, we decided to crunch the figures released by the Customs Administration and see if the numbers add up. In most of these reports, the author(s) claimed the figures declared to the Customs Administration were wrong. And to substantiate their claims, they compared the data of the Iranian Customs Administration with the data provided by the customs offices of other countries. Whether or not the information these analyses rely on is accurate, one should keep in mind that sales of steel sheets come on the back of orders.
In light of the fact that there is a 3-4 month gap between the time an order is placed and actual delivery at destination and there are large fluctuations on global markets, comparing the price of the items at the time of delivery with current prices is wrong and diversionary. For instance, in late 2015, orders were placed for a huge volume of products Iranian steelmakers were producing, the actual delivery in 2016 came when there was a leap in global prices.
Besides, although the figures released by the Customs Administration feature a breakdown based on the thickness of products, they say nothing about the price difference of different grades of hot coils. It comes as the difference in such prices could be as high as $100 per ton for hot products. So companies and countries that offer special grade products have a higher registered price at the customs.
That means, the best way to compare prices between different countries is to consider the basic price of similar products during a certain period of time. The following chart, which features information from Metal Export, compares the prices of Iran’s hot coils in 2016 with those of other major exporters such as China, Russia, and Ukraine.

Iran         Ukraine         Russia         China   
 
As the chart above clearly indicates, the prices of Iranian steel exports in each month have been consistent with global prices and accusations that Iranian products have been sold cheap are baseless and biased. Besides, the fact that there is a price difference in different countries’ products, which is not usually high, is nothing unusual. Our experience shows that thanks to a number of factors such as demand, value of the foreign exchange, payment conditions, competiveness, etc. different markets have different price elasticity at any given time.  
Besides, at points of departure, it is standard procedure for exporters to just declare the technical specifications and weight of the items they are shipping overseas. They are not asked to declare the price of their items. That means comparing the prices of items at the customs office of departure and the customs office of destination is invalid and the actual prices are only accessible when the financial statements of the companies are referred to.
Another point about the recent decision of the European Union to impose tariffs on major exporters of steel to the union, including Iran, is that contrary to allegations, it was not a punitive measure only against Iran for selling its products cheap. Rather, the European Union acted on a request by the European Steel Producers Association, to support local steelmakers. It also came despite objections by downstream industries across the EU to imposition of tariffs on the products of companies which export steel sheets to EU nations. As for Iranian steel products, 57.5 euros in tariffs was imposed on each ton, whereas for Russia it was 96 euros per ton. This is quite a natural practice in most countries.
Now the question is: Why is the Pipe and Profile Producers Syndicate angry about import tariffs in the Islamic Republic of Iran? Over the past two years, the syndicate has tried to attack those in charge and welcomed imposition of tariffs in other countries in the same breath. It should be noted that over the past two years, 162 anti-dumping cases have opened in steel markets around the world; thus different countries are introducing tariffs to protect their local steel industries.
The extensive media measures in the past two years to tarnish the image of MSC have been mostly taken by certain people because special privileges associated with imports of steel products have been cut. Such privileges include access to foreign exchange at the official rate, and to long-term, low-interest financing, and benefits associated with the difference between the official interest rate and the rate these people pay, and absence of tariffs on imports of alloy steel sheets. Interestingly, imports of steel sheets in the name of alloy products registered a 1,000 percent increase from 203,000 tons in the 12 months to March 21, 2015 to 1.955 million tons one year later. That translates into evading customs duties to the tune of $90 million and subsequent tax evasion. Besides, not selling steel products at home causes losses and kills jobs. This could be quite a piece of news for oversight bodies which seek to turn up the heat on corruption. 


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