Iran's plan to increase steel capacity could leave 20 million mt/year available for export, Bahram Sobhani, managing director of Mobarakeh Steel, said Tuesday at Worldsteel-50 in Dubai.

The government is planning to increase production to 55 million mt/year by 2025, with 35 million-36 million mt likely to be consumed domestically, he said. Iranian exports are currently around 6 million mt. Not all delegates were happy to hear this, however. The strategy was "very questionable" with Iran following a similar trajectory to China -- "increasing capacity without really knowing where to go with it ... Potentially Iran will be a problem going forward," Axel Eggert of European steel producers' association Eurofer told S&P Global Platts on the sidelines of the conference. Sobhani played down the increased export availability. "If capacity increases to 55 million mt, it does not mean production will be at that level, it could be another five years until we reach this," he said. Countries bordering Iran in the south and east had no steel production and good markets, and the eventual resolution of conflicts in the Middle East would mean the export capacity was necessary, Sobhani added. He said economic growth moved up from minus 2% a few years ago to 6% last year, amid stronger demand for steel. There has been a huge investment in the country's car industry, and lifestyle changes mean people are buying more household appliances. At the same time, infrastructure is developing quickly and residential housing construction is also increasing. All this suggests higher steel demand going forward, while pent-up demand in the oil and gas industry after sanctions were lifted could also buoy steel buying. Mobarakeh recently installed a billet caster at its plant, and has been exporting steel.

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