After oil, Iran’s steel industry was the main target of US sanctions against Iran during Donald Trump’s presidency, but now, after his presidency, the US government does not seem to have succeeded. Let us explore the details of this issue.
The latest round of US sanctions on Iran’s steel, aluminum and copper exports inherently targets the jobs these industries provide in order to destabilize the country and challenge the Iranian regime from within. By imposing these sanctions, the Donald Trump administration imagined that Iran’s industrial sector would disintegrate in less than nine months.
Trump had said the new sanctions would “affect Iran’s revenues from industrial metals exports, which account for 10 percent of Iran’s export economy,” and warn other countries to allow Iranian steel and other metals to enter their ports. Do not have
Analysts at the time believed the sanctions were aimed more at stagnating local sectors of steel, copper and industries directly linked to the steel supply chain.
*** Direct connection between Iran Steel and employment
According to Iranian media reports, more than 600,000 workers work directly in the metals sector and mining companies, and the imposition of heavy sanctions could easily destroy the living conditions of the poor in Iranian society. On the other hand, analysts acknowledged that the automotive sector, which is the largest consumer of Iran’s steel products, employs another one million workers, who together account for about six percent of the total Iranian working population. In practice, these sanctions will severely damage Iran’s economic and employment base.
According to the Brussels-based World Steel Association, Iran produced 16.900 million tons of crude steel when Donald Trump was elected the 45th President of the United States in 2016, a trend that was growing rapidly in Iran. Because Iran was negotiating with major European steel companies such as Danieli this year, many messages were exchanged for international cooperation between European traders and Iranian traders based on cooperation in the field of steel, and companies Like Pirmetals, they had entered into negotiations with Iran, and it became clear that the growth of Iranian steel production would be accompanied by a very significant growth.
In these years, the growth prospects of steel production in Iran reached 55 million tons by 2025. But the negotiations that took place during this period, and sometimes the trade agreements that were signed between Iran and Europe, remained unfinished or stopped due to the first round of US sanctions.
*** Dark prospects for Iran’s steel industry after the embargo
Since then, Iran’s steel deals, steel mills, Iran’s electrode steel and metals trade have once again come under US secondary sanctions. In line with the threat of all companies cooperating with Iran in this sector, even the transportation of Iranian export shipments as well as the import of raw materials were subject to US sanctions. And painted a dark picture for the Iranian steel industry.
Perhaps the main effect of the US sanctions on Iran’s economy is the sharp decline in Iran’s monetary value. Iran’s currency lost more than 80 percent of its value against the US dollar last year, hitting a record low, and the government was forced to allow the central bank to intervene in May to defend its monetary position. Give in foreign exchange markets.
*** The inability of the United States not to develop Iran’s steel industry
However, US sanctions did not prevent the development of Iran’s steel and raw materials industry. While Iran produced 32 million tons of crude steel in 2019, up 88 percent in four years, US steel production fell 24 percent from the US 30-year average with Trump’s unwavering support for the US steel industry. And in fact, it is a huge weakness for the US steel industry. This decline in production was strongly influenced by the Corona virus epidemic and the closure of the country’s industries. While in Iran, despite the rapid growth of the Corona virus epidemic, the industrial sector continued to operate and the Iranian steel industry had closed the corona barrier in terms of closure.
An Iranian steel industry expert said that the sanctions on Iran’s steel had little effect on the claims of the technology sector: “It may be too late to impose sanctions because Iran’s steel technology has become almost indigenous and they do not really need foreign companies.” The opinion of one of the leading analysts in the field of steel in the world shows that in practice the steps of independence and self-sufficiency in the steel supply chain have reached their final steps and practically global sanctions can not paralyze Iran’s steel industry alone.
*** Capital growth of domestic steelmakers despite the stock market
The use of in-house technology significantly reduces development costs, although it is likely to slow development. Iran’s steel industry is almost a domestic industry with a competitive price, so there is always a steel market, even in times of sanctions. Another reason for the growth of production in the domestic steel sector was the inflow of large sums of money in the steel index shares in the commodity exchange The share of parent companies such as Mobarakeh Steel of Isfahan, Khuzestan Steel, Isfahan Steel in the stock market witnessed a sharp growth that actually provided the necessary costs for investment and practically was able to provide a large part of the financial needs of industries active in Supply steel.
According to a wide range of steel industry analysts, the change of US President and the possibility of lifting sanctions can not help change the conditions for the development of Iranian steel, because domestic technologies have done their job and there is no need to import technology, in In fact, the main losers in US sanctions over the past four years have been European engineering companies. Many of these companies with their presence in the Iranian steel market could attribute part of Iran’s profits in the production of crude steel to themselves and practically compensate for part of the decline in their stock indices. But by leaving the Iranian market from this pristine market They moved away and practically did not make much profit in their subsequent investment scenarios.