Iran steel production can surpass Turkey: Bastug

Iranian steelmakers are increasing production at a rate that could see the country's overall production surpass Turkish steel output in 2020, Turkish steelmaker Bastug's deputy general manager Emrah Ugursal said yesterday at the eighth metal expert MENA billets and flats conference in Beirut, Lebanon.

Iranian steelmakers' production costs are lower than Turkish steelmakers' costs, which already puts them in a very competitive position in the seaborne billet markets. And increasing domestic production could see Iran increase its global steel industry and Turkey become "old-fashioned", Ugursal said.

Iranian crude steel production stood at 14.091mn t in the first seven months of 2018 but increased by 6.4pc in the corresponding period of 2019 to 14.988mn t.

Turkish crude steel production stood at 22.184mn t in the first seven months of 2018 but decreased by 10.2pc to 19.919mn t in the corresponding period of 2019, industry association WorldSteel data show.

The large volume of Iranian seaborne sales compared with the lack of Turkish seaborne sales heard in August could suggest the gap is already narrowing further.

"Iran can close the gap on Turkey under favourable conditions, and any softening of US sanctions [on Iran] will support this," Ugursal said. "No longer an emerging markets star performer, Turkey has fallen into its first recession since the financial crisis a decade ago."

Ugursal cited data from the Turkish Statistical Institute released on 2 September that said Turkey's gross domestic product contracted by 1.5pc year on year in the second quarter of 2019, following a 2.6pc contraction in the first quarter.