The Iran’s Steel & Mine Conference was organized by Donyay-e-Eghtesad in Tehran last week and some of the sector’s top officials expressed their views on the outlook of the industry.
1. Forced pricing by the government should be stopped: Mostafa Moazen Zadeh, the consultant to the Vice President, Eshagh Jahangiri, pointed out that the forced pricing by the government is against the steel industry interest and asked the Ministry of Industry, Mine, and Trade to stop such practice, leaving the price discovery to IME.
2. Relating each and every product prices with KSC billet price is not logical: Mostafa Moazen Zadeh also criticized relating each and every product price in steel supply chain to KSC billet price and said it has no logical justification whatsoever, since each product is of different nature.
He also made an example from foreign markets and said “Is iron ore pricing a proportion of CIS billet price? Of course not”. He also stressed the supply-demand mechanism for finding out the price of products in steel supply chain as the best solution for the market.
3. Government interference with pricing a result of poor non-government associations: Mohammad Shariatmadari, the Minister of Industry, Mine and Trade defended the performance of his Ministry and recognized “the government interference with pricing a result of poor Non-Governmental associations”.
4. Rail development is vital for steel industry: The Minister also expressed his concerns about railway development in the country and said “if the railway network is not developed in near future, the road accidents would take a lot of lives from the citizens”.
5. Steel associations benefits steel industry: Market participants believe that one of the associations that had a big effect on Iranian steel exports was the Iranian Steel Export Association (ISEA) which not long ago came to existence. But, its practices were eliminated not so long after establishment as the giant Iranian steel exporters exited the Association one after the other.
Another effective association is Iranian Steel Producers Association (ISPA) that has made important decisions in Iran steel industry through its lifetime. The decisions that evidence shows has supported the benefits of a specific companies.
6. Steel association Vs Company directors: A number of matters are worth mentioning about such association; first, the ordering of its board of directors is not so much balanced as analyst stress in Iran’s domestic market. Plus, the national outlook has been replaced by financial benefits outlook among the board, since most of them are the CEOs of big steel makers and re-rollers and try to achieve their company’s objectives.
7. Export saved Iranian Steel Industry: Mehdi Karbasian, the Head of Iranian Mines & Mining Industries Development & Renovation, in his speech regarded the performance of IMIDRO and said “Export saved Iranian Steel Industry and raised the brand of Iran Steel in the world”. He also stressed the wrong interpretation of some participants of “raw material export” and said: “when a process is made on a product in the country, it cannot be called raw export anymore”.
8. IMIDRO Invited international companies to cooperate in mining: Mehdi Karbasian mentioned inviting some international companies to cooperate in Iran mining activities. But, insiders believe that the government should not enter investing in this area. Instead, it should ask private sector to do so. In the last governmental MOU with POSCO with regard to establishing the steelmaking in Chabahar, the Korean company exited the agreement without any heads-ups as a result of Saudi pressing.
9. Involving Private Sectors will bring handful of advantages for country: Private sector participation in such project will bring about a handful of advantages for the country; first, the private sector has less limitation comparing with its state-owned counterparts, so they are able to negotiate more effectively.
Also, the private sector is able to maintain a better level of confidentiality in negotiations and the results. Most importantly, since the private sector enjoys the business and industry insiders, it is capable of identifying and the more efficient technology and try to internalize them into the country.
10. Merger of Steel Companies enhance power of Competition: Mr. Karbasian also advocated the merger of steel companies and mines as a “way of enhancing the power of competition” and “optimizing the resources”.
In general, the rail network development, non-interference of the government in pricing, supporting the exports, and backing the merger of small and medium-sized companies were of utmost importance in the speeches of these three top officials.
However, the developments of ports, especially Chabahar Port, reducing the lengthy paper-work and bureaucracy between the organizations within the steel industry, promoting the quality products, modern marketing to step in new markets, and facilitating the foreign investments are among the subjects that has slept their minds and need a great deal of attention.
Some of the live pictures of the Event:
Pictures Credit : IME
Inputs taken from Planner
Leave a Reply