Steel producers obliged to offer 60% of annual output at commodity exchange

May 9, 2020 - 15:30

TEHRAN – The Iranian government has obliged the country’s steel companies to offer at least 60 percent of their annual production at the commodity exchange market, IRIB reported on Saturday.

As reported, steel ingot producers must also plan for 25 percent of their remaining production to be allocated for exports, and the rest will also be set aside for long-term contracts or exports, according to the Islamic Republic of Iran's Customs Administration (IRICA).

Based on the new regulations by the country’s market regulation committee, steel ingots can only be traded at the country’s commodity exchange and the companies that do not follow the mentioned regulations will face legal penalties.

Iran’s annual steel ingot production is planned to increase 3.2 million tons in the current Iranian calendar year, which began on March 20, according to Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).

In its latest report, the World Steel Association (WSA) announced that Iran’s crude steel production increased by 30 percent in 2019 while the average global growth in this sector stood at 3.5 percent.

Based on the WSA report, Iran produced 31.9 million tons of the mentioned commodity during 2019 compared to the last year’s nearly 24 million tons.

In early May 2019, Washington imposed new sanctions on Iran's metals and minerals sectors in an attempt to [as the U.S. president Trump put it] “choke off the country’s largest non-petroleum related sources of export revenue".

While at the first glance [considering Trump’s comments], this might seem to be a heavy hit to Iran’s economy in the near future but a close look into the country’s export data could reveal Trump’s great miscalculations. In fact, this could even be considered a “blessing in disguise” for the country’s minerals and metal industry.

EF/MA

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