On October 16, Mobarakeh Steel - along with a number of other Iranian companies - was added to the list of sanctioned entities by the US Office of Foreign Assets Control (OFAC).

“Mobarakeh Steel Company... is used as a revenue stream for Bonyad Taavon Basij’s economic conglomerate,” the US Department of the Treasury said.

Bonyad Taavon Basij is a network of corporations and financial institutions that the Treasury says provides “financial support to the Basij Resistance Force, a paramilitary force subordinate to Iran’s Islamic Revolutionary Guard Corps.”

Some market participants were concerned that the new sanctions may affect the company’s ability to export flat steel products and slab, adding that the restrictions could also be extended to Mobarakeh’s subsidiary Hormozgan Steel, another large exporter of slab.

A steel industry expert in Tehran said the sanctions would hurt Mobarakeh, but without entirely stopping its exports.

In a statement to investors, however, Mobarakeh Steel said: “International sanctions are nothing new and Mobarakeh has faced them throughout the years just like other sectors of the Iranian economy... this will not disrupt the company’s production, financial activities and exports.”

Bahram Sobhani, the president of the Iranian Steel Producers’ Association, was quoted in the organization’s statement as saying, “The new sanctions will limit the access of Mobarakeh Steel to the US monetary and financial networks, while this company has never been in contact with these networks before, and so the sanctions will have no effect on the company’s economic activity inside or outside of the country.

“While trading of steel billet and other steel products has been on the US sanctions list since August, Iranian steel companies, including Mobarakeh Steel, continue to export now.”

On August 7, the US reimposed sanctions on Iran’s sale, supply and trade of steel, aluminium, graphite and coal, as well as auto products.

Over the first five months of the current Iranian year (March 21 to August 22, 2018), Mobarakeh Steel exported 263,006 tonnes of slab, registering a growth of 30% from the 202,312 tonnes exported over the same period last year, according to statistics provided by the Iranian Mines & Mining Industries Development & Renovation Organization.

Meanwhile, Mobarakeh Steel’s hot-rolled coil exports almost tripled year-on-year, totaling 315,000 tonnes for the five-month period.

Hormozgan Steel Company exported 373,549 tonnes of slab in the March to August period, down by 15% from the 439,470 tonnes exported during the same period last year.

Fastmarkets’ weekly assessment of the Iranian export slab price was $440-445 per tonne fob on October 17, a decline from $450-460 per tonne fob on October 10, due to exporters of steel billet and slab continuing to cut prices in an attempt to win deals in the current unfavorable market conditions.

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