"Iran's steel production and demand have been on a constant rise for the past 10 years, with domestic demand always surpassing production. Turkey intends to cooperate with Iran in filling this gap," said the Turkish official.
Ekinci added that production in Iran has increased from 8.7 million tons in 2004 to 16.3 million tons in 2014, while demand jumped from 12.9 million tons to 20 million tons in 2014. He was citing data from the World Steel Association.
Iran was one of Turkey's main steel export destinations before the imposition of sanctions by the West over Tehran's nuclear energy program. Turkey exported close to 1 million tons of steel to Iran in 2010. However, the figure declined to 168,000 tons in 2014.
Referring to Iran's significant potential to expand its steel sector by making use of its vast mineral reserves and cheap energy costs, Ekinci said Turkey aims to expand its ties with Iran beyond merely exporting steel products, as it seeks to undertake joint ventures and share its technological competency and expertise with Iranian firms in steel production and industrial machinery manufacturing.
"Considering the objective of annually producing 55 million tons of steel as per Iran's 20-Year National Vision Plan (2005-25), and the hurdles facing the industry to reach this figure, Iran can use all the help it can get and Turkey is ready and willing to cooperate," he said.
Ekinci emphasized that Turkish firms, having recognized the potential of Iran's steel market, require detailed information regarding the exact demand of the market and potential areas of cooperation with Iranian firms.
The official pointed to China, the steel producer behemoth and its dumping strategies that disrupt global steel markets, like those of Iran and Turkey and said Turkey, with its industrial prowess and strict adherence to free market policies, and Iran with its vast mineral resources and considerably low energy costs, can join forces and cooperate to challenge China's dominance in steel production.
"China's aggressive steel dumping is taking away potential markets from other steel producers," he said, adding that China's only advantage is its low prices, which come at the expense of a significantly inferior production quality.
China accounted for close to 50% of the 1.6 billion tons of steel produced worldwide in 2014, with exports standing at 92.9 million tons in the same year. Its exports are expected to exceed 150 million by the end of 2015. The implications for the global steel industry and especially Iran are serious.
According to Ekinci, the only way to stand up to the Chinese is to raise import tariffsas the United States has put up a strict 200% tariff on Chinese steel.
Turkey is the world's eighth largest steel producer and a global leader in the export of reinforcement bars, exporting steel products to 200 countries, mainly in North Africa, Middle East and Central Asia.
By Financial Tribune
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