The United States Has Imposed Economic Sanctions On Iran

- May 14, 2018 -

US President Donald trump announced on Tuesday that the us government would impose "the highest level of economic sanctions" against Iran.Once the us exits the 2015 nuclear deal, it will significantly slow Iran's steel production expansion plans, with relatively limited impact on its steel and iron ore exports.

Since 2015, Iran has been trying to promote the development of national steel industry project, the project plans to Iran's steel production capacity from the current 32 million tons per year to 2025, 55 million tonnes a year, nearly doubled.

It is expected that the financing difficulties arising from the resumption of economic sanctions against Iran will severely hit new steel mills or ongoing steel projects.Many steel related projects have stalled because of uncertainty about U.S. policy, sources said.Financing has always been a big problem for these projects because they are only allowed to work with Banks that have no relationship with the us.

If Iran does not cooperate with European metallurgical equipment manufacturers, it is expected that Iran will turn more to the technical equipment needed for China's steel and metal development projects.

Iran has become an important exporter of steel in recent years as its steel production has grown faster than domestic steel demand.According to the Iranian steel producers' association (ISPA) this week, the total volume of steel and direct reduced iron (DRI) exports exceeded 9 million metric tons in the fiscal year ending March 20, 2018.In the total export volume, the steel billet and billet of billets and billets accounted for 6.87 million metric tons, an increase of 84 percent year on year.

Iran plans to increase its total exports of steel and direct reduced iron to 12 to 13 million metric tons in the current fiscal year ending March 20, 2019, according to the Iranian steel producers' association.Iran also plans to raise crude steel production to 26 million metric tons this fiscal year from 21 million tons last year.

Iran does not export steel to the United States.Iran's steel exports to Asian countries, including Thailand, Indonesia and the Philippines, Taiwan, including Oman, the Middle East countries, as well as European countries, including Spain and Italy.

Trade sources said, Iran's exporters generally don't use l/c, and their export trade is no relationship with the United States of traders, therefore, is expected to restart economic sanctions in the United States, after Iran's export trade will not be much of an impact.Iran's steel exports have become competitive because of the 50 per cent devaluation of the Iranian currency last year.

Iran's iron ore exports have fallen in recent years as it needs to produce more iron ore to meet growing domestic demand for steel.As of March 20, Iranian iron ore exports had fallen from a peak of 25 million metric tons a year a few years ago to 18 million metric tons.In addition, because almost all of Iran's exports of iron ore are destined for China, the export of minerals in the short term will not be directly affected by the resumption of U.S. economic sanctions.

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