Global steelmakers watch out for Iran

Even after seven years of international sanctions and economic pain, the Islamic Republic still consumes more steel than France or Britain. She is a major car manufacturer and needs infrastructure development for her oil and gas industry. Iran consumes about 20 million tons of steel products per year, most of which are of its own production.

When economic sanctions were eased, Iran opened up as an untapped opportunity for Western steel exporters, particularly high-quality grades. ArcelorMittal (MT) and the Novolipetsk Iron and Steel Works supplied steel to Iran even before the sanctions in 2007, when it imported 12.2 million tons of metal per year.

ArcelorMittal, the world's largest steel producer, is one of the best sourced from its plants in northern Kazakhstan. Russian manufacturers, including NLMK, say geographic and infrastructural ties to Iran create good opportunities for them too.

About 45 manufacturers sent representatives to a metallurgical conference in Tehran last month to explore export and investment opportunities in Iran's domestic industry.

Currently, companies supplying certain products, including steel, are still at risk of punishment from the United States, which has isolated the Islamic nation due to the development of its nuclear program. China has never stopped exporting to Iran and sold 276,000 tons of steel to that country last year.

In addition, domestic steel production in Iran rose 6.5 percent to 15.4 million tons last year, more than double the global growth rate of 2.4 percent, according to the World Steel Association.