Iran Well On Its Way To 2025 Goal

Iran is rising in Asian steel market. As per World Steel Association (WSA) data, Tehran has already manufactured more than 66 percent of West Asia’s total steel production in July 2017, with volumes at 1.575 million tons (mt). Moreover, compared on a year-on-year (y-o-y) basis, there was a clear 16.58 percent rise in Iranian domestic production as it was 1.351 mt in July 2016.

- Kingshuk Banerjee

It is a clear 14 percent rise on a year-on-year basis at 11.522 mt during January-July, 2017 over 10.100 mt during January-July, 2016. And riding mainly on Iran’s resurgent economy, West Asian steel production increased from 16.492 mt in January-July, 2016 to 17.907 mt in January-July, 2017, a clear 8.58 percent jump.

And it is not the end of the story. As per the goals set in the 20-Year National Vision Plan (2005-25), Iran seeks to become the world’s 6th largest steelmaker by 2025 with a crude steel output capacity of 55 mt, out of which 14 mt would be exported.

According to West Asian observers, this surge in steel production could well be depicting Iran’s rise as a regional economic powerhouse in the near future, overcoming many an obstacle.

Challenging journey

Keeping in mind that Iran produced 17.895 mt of steel in 2016, the goal of 55 mt capacity by 2025 might be seen as a far cry to the critics. But Tehran has already hiked its capacity from 21 mt to 31 mt in the last 4 years. However, critics would still like to point out that producing 55 mt of crude steel would need 160 mt of iron ore, which, in turn, would require nearly 100 mt of increase in the current ore output. And this is while iron ore miners are grappling with liquidity issues, which prevent them from embarking on expansion plans.

The critics would further point out that the goal would also require exports of about 21 mt, with domestic demand standing at about an estimated 34 mt. Now, given the current global situation, there would be a very slim chance for Iranian steel to break into a new market, especially when overproduction has become a major issue in the global steel sector.