Iranian steel exports have started plummeting since the US reinstated sanctions. The EU has already imposed anti-dumping duties on some of the Iranian steel.
According to Iran Steel Producers Association, Iran produced 14.24 million tonnes of steel with an increase of 10% in the first eight months of current Iranian year started from 21st of March. Initially, it was expected that by the end of the current Iranian year, the country could produce around 25 million tonnes of steel, while about 9-10 million tonnes of surplus steel could be exported. However, so far, nearly 5.3 million tonnes of steel products have already been shipped in the first eight months, mostly before the sanctions reinstated.
The deteriorating steel exports will put more pressure on Iranian production and planned steel capacities. Domestic steel producers are likely to lobby the government to facilitate them through their exports.
Iran has so far got some success to keep the trade alive with the EU through Special Purpose Vehicle (SPV) to bypass using the US dollar. However, we do not think that it would provide much support to the Iranian steel exports.
Meanwhile, Iran is likely to return to its barter trading system or other trading arrangements which it was actively involved in the past during the sanction period.