On May 8, 2018, US President Donald Trump announced the US will withdraw from the Iran nuclear deal that was initially adopted under the Joint Plan of Action in November 2013 between Iran and six countries including China, France, Russia, United Kingdom, US, Germany and the EU.
In July 2015, Iran and the other entities confirmed the plan with the Roadmap Agreement. The agreement provided that in return for verifiably abiding by its commitments regarding nuclear activities, Iran would receive relief from US, EU and United Nations Security Council sanctions. In a joint statement to the US, leaders in the United Nations Security Council (UNSC) stated that the nuclear deal remained the “binding international legal framework for the resolution of the dispute,” raising the possibility that the US will be found in violation.
Regardless, several sources have commented that the new US status may affect Iran’s projects and exports temporarily, although given Trump’s rhetoric over the past year, contingency plans in Iran were likely in process.
Iran presently has a steelmaking capacity of 32 million mt annually, producing 21.8 million mt of crude steel in 2017 according to the World Steel Association. Iran is projecting a total of 25-26 million mt in crude production in 2018, with a capacity target of 55-60 million mt by 2025 with an 80 percent utilization rate (44-48 million mt of crude steel production). Iran’s steel products are exported to the Middle East, Africa, and Asia.
With EU relations and transactions possibly affected, Iran is expected to work more closely with China to finance and develop ongoing projects. Iranian steel exports are expected to continue despite the new US status due to “highly attractive pricing, although, the short-term shakeup may provide other countries with opportunities to sell and firm up prices in the region.”