Iran, the largest importer of steel in the Middle East, is pressing ahead with plans to expand output capacity to achieve self-sufficiency by 2014 and then boost it fivefold by 2025.

Around $32bn of investment was needed for the country’s long-term goal to reach a steel capacity of 55Mt from 11Mt now, an executive from state-owned Esfahan Steel Company told the recent Metal Bulletin’s steel and iron ore conference in Dubai.

Around $14bn worth of steel projects are currently under way but some face delays or cancellation due to the US sanctions and increasing manpower costs,” Hadi Hami, Middle East steel specialist in the Alam Steel Group said.

During the steel conference in Dubai, Iranian producers echoed the official line, saying Iran did not have problems obtaining financing and many foreign firms were still keen to do business with the Islamic Republic.

Countries including Japan, Korea, Australia are currently implementing projects in the country,” one steel executive said, but did not say which companies were involved.

Iranian National Steel Industrial Group (INSIG), which was privatised more than a year ago, also plans to double its production capacity in the next three years.

Its managing director, Abdolreza Rasouli, said the expansion will cost about $500M and the company had already secured the financing needed, partly through loans from local banks.

The projects would bring the company’s capacity to more than 3.1Mt/y, from the current 1.5Mt/y.

He added INSIG was in talks with Chinese and Italian companies to cooperate in technology.

Rising population and growing housing needs estimated at 1 million new homes every year meant Iran’s steel demand was set to grow well above the average rate in the region, experts said.

“Construction sector grew by 11% in 2008, before the crisis,” Hami said. “It will grow by 3% in 2010, after expanding 1.5% in 2009,” he added.

Source Gulf Times, Doha, Qatar