Mehdi Karbassian said that at the time and when interest rates in developed countries are about 2 to 3 percent or even zero, foreign companies by investing in Iran can gain significant benefit. If a foreign company invests one hundred million dollars in Iran, he will receive 18% profit. He said that the profitability of this kind of investments is better for both sides. For example a country like Japan that interest rate in is zero, while this country does not have any gas, iron ore or coal resourses. Regarding that Japan is one of the largest steel producers in the world. Therefore, with investing such countries in Iran, mutual benefit can be achieved.
Deputy of industry and trade Minister talked to Donyae Eghtesad newspaper, he said that beside foreign companies, Iranian investors in abroad should also be considered and we hope the government adopts policies that allow investors enter their capitals to invest in Iran.
Karbassian in another part of his speech talked about the current state of the global steel market and its impact on the domestic market, he said nearly two years ago, steel consumption and production in China was equal and amount of export of this country was not too much and it was almost 30 to 35 million tons per year. But the sharp decline in demand in China, resulted in country's steel consumption reaching from 800 million tons to 600 million tons, we also expect this amount will be reduced even more by the end of 2015.
He added that China, despite the declining domestic demand did not reduce its steel production and therefore started to export its surplus which is around 150 and 200 million tons. Whereas now we see that more than 2 million tons of various steel products, including beams, plate and so on remained in Iranian steel stocks.
He Stressing that reduce in domestic consumption of steel is related to stagnation of the market and slowing rate of construction and development projects, Karbassian also said that these factors have led us to not reach 18 million tons production in this year as predicted before.
Karbassian said now with programs such as rescheduling debt, and aid to steelmakers are needed and also government should help housing and development projects to recover the market.
Karbassian mentioned programs of big mining industries in the world. He said: Today, not only in steel but also in all domains, including copper, aluminum and so on, the world is moving towards reducing production costs. Since the market is limited and in the future, we do not have markets such as India and China markets that have large needs, so completion will be really difficult to find new markets.
Reduce in final price
He added that steelmakers should think seriously about reducing cost, increasing quality and driving their products toward market needs and customers. There are advantages in Iran that make it possible. The advantage of this is that our country has a lot of iron ore reserves, so in terms of iron ore pellets and concentrates as raw materials there is no problem.
Karbassian said second advantage for steelmakers and mining industries in Iran is relevant to reasonable price of gas in Iran. Obviously, low cost of gas is not enough to reduce production costs and we need to improve the production lines and renew them, but if Steelmakers do not move towards reducing costs, only support of government cannot help to solve all the problems.
He added that the government's medium-term assistance can help to improve the situation, he mentioned the issue of tariffs, Karbassian believes decision on this topic in Iran is very slow, although in the beginning of the year tariffs of steel importing increased between 15 and 20 percent but after determining this fact that this cannot be so effective, nothing happened for solving this problem. Unfortunately, the decision to support domestic production usually takes at least four to five months, while this process is very fast in other countries.
Chairman of IMIDRO said: with taking wrong policy in supporting some industries such as automotive, we build walls and barriers to import and export for companies that both of them result to arrear. In the steel industry as it is, now it is the time for steelmakers to try to increase the quality of their products and reduce the prices of finished steel and this strategy should be continued on this path, otherwise we cannot expect development in this industry.