Jafar Sarqini said that the restrictive measures imposed by US President Donald Trump on Iran’s iron, steel, aluminum, and copper sectors, seem "unlikely" to significantly affect the country's metal industry.
"There is not much concern about these sanctions as Iranian steel, copper and aluminum have their own special customers in the world," he said, Press TV reported.
Sarqini also stressed that Iranian goods in the metal sector have high-quality and meet global standards.
"There is no specific problem regarding the selling of Iranian metals in the international markets because they always have their special customers due to their high quality and value," he added.
The official also noted that Iran's exports in the metal industry sector did not decline over the past year following Washington's withdrawal from the nuclear deal, but rather increased compared to its previous year.
Last year, he added, Iran produced 25 million tons of steel, which make up 1.5 percent of the world's steel output.
Iran plans to boost steel output to 55 million tons a year by 2025, of which 10-15 million tons would be earmarked for export.
In a statement released on Wednesday, Trump said that the new sanctions target "Iran's revenue from the export of industrial metals – 10 percent of its export economy."
He also warned other countries that "allowing Iranian steel and other metals into your ports will no longer be tolerated.”
The announcement was made on the first anniversary of Washington's unilateral withdrawal from the nuclear agreement — officially called the Joint Comprehensive Plan of Action (JCPOA).
Since then, the Trump administration has re-imposed sanctions on Iran's energy, ship building, shipping, and banking sectors under a campaign of “maximum pressure” against the Islamic Republic.
Little effect on Iran
Meanwhile, S&P Global wrote quoting Iranian and European steelmaking sources that the latest US sanctions on Iranian metals may change little in the short term for Iran's steel exporters or their customers abroad.
The Iranians will attempt to continue exporting to neighboring countries in the Middle East and North Africa (MENA) region in the case of steel products and to trade partners including China and India in the case of iron ore products, Iranian steel and iron ore sources said.
Despite the US' imposition of secondary sanctions since August 2018 on supply and trade of steel, aluminum, graphite and coal with Iran, "the [Iranian] steel industry has maintained its position in both production and export in the MENA, although we can't ignore the role of sanctions on technology transfer and cooperation of Iranian companies with their foreign partners," said Reihaneh Sarlek, an Iranian steel market specialist.
"Iranian metals have been under sanctions before, with some major manufacturers included in the sanctions list, so the new round of sanctions is a kind of psychological warfare against Iran," said Amir Hossein Kaveh, the secretary of Iran's Syndicate of Steel Pipe and Profile Manufacturers. "In the face of previous sanctions Iranian manufacturers have developed new markets in South East Asia, and exports to neighboring countries has been increasing since then."
According to Asian sources, the secondary sanctions hit mainly trade of Iranian steel for use in the oil industry abroad.
The US International Trade Administration's Globe Steel Trade Monitor report, published a year ago, classified Iran as the world's 18th biggest steel exporter. The Iranian Steel Producers' Association put steel products exports at 7.9 million mt in the last Iranian year (to March 20), a decrease of just 7.1% on the previous year, despite the secondary sanctions.
While some difficulties may now occur in transportation – including increased freight and insurance costs for those shipping companies that will still serve Iran – these are likely to be offset "by the high quality and cheap nature of Iranian products," according to Kaveh.
Tommaso Sandrini, the head of the steel group of Italy's Assofermet, said the metals trade group was "very concerned" about the effects of Trump's new wave of sanctions against Iran.
"As far as steel is concerned, the effects of the sanctions will be quite limited: AD (anti-dumping) duties already in place on HRC (hot-rolled coil) make Iran not a viable option for EU buyers, regardless of the new sanctions. Iran is already out of the import game for the most important steel product category," Sandrini said. "Despite that, the new sanctions will depress even more the global economic scenario... The sanctions themselves are not devastating for steel but they will contribute to dry up other business opportunities with a country that has always been a close partner for Italy."
Impact may be bigger on imports
Kaveh noted that Iranian manufacturers and consumers are likely to be impacted by the decline in steel imports that may come with the new sanctions, and that has already occurred as a result of the secondary sanctions. Imported products have benefited Iranian manufacturers' efficiency, Kaveh said.
"Before the sanctions we used to import about 3 million mt of steel sheet annually and export the same amount but now this process has stopped and self-sufficiency is a necessity," he said. Late last year, Iran's total steel exports were put at some 4 million mt/year of products, lower than traditional levels.
ArcelorMittal, the world's biggest steelmaker, noted in its 2018 US Securities and Exchange Commission 20-F form that its Europe segment stopped selling steel flat products, coated and coated, alloy steel plates, sections, wire rod and seamless pipes both directly and indirectly for projects in Iran from June 2018, after generating $9.8 million in general sales revenue and an additional $2.54 million from automotive sector revenue from these sales in the January-June 2018 period.
ArcelorMittal's Dubai-based trading subsidiary, ArcelorMittal International FZE, AMID, has not had any direct or indirect sales to customers in Iran since November 2018, it said. AMID's sales to customers in Iran had generated $66.2 million in revenue in 2018, amounting to 4% of AMID's total sales last year it said. The company said its risk of doing business with Iran is not mitigated by the EU Blocking Regulation, passed by the European Parliament in August 2018 to protect EU citizens and governments from the impact of the US secondary sanctions.