Iran Economy in Brief – No. 2

Tehran: “Buongiorno Italia!”
180 Italian companies from Energy, Environment, Medical Equipment, Construction and Automobile sector, visited Tehran to negotiate mutual-investment opportunities and meet potential partners.
“Since 90% of Iranian industry is run by small and medium-sized companies, Iranian-Italian partnership would definitely lead to great achievements,” said Mohammad Reza Nematzadeh, Minister of Industry and Business.
Giovanni Castellaneta, chairman of SACE insurance group, meeting with Mehdi Karbasian, CEO of IMIDRO, offered € 5 billion insurance coverage in Iranian Mine Industry, calling it an initiative collaboration between two countries.
Now the two countries aim to reach the milestone of € 3 billion trade-size in three years.


Do new IPCs attract investors?
Two-day conference in Tehran unveiled new frameworks of Iran Petroleum Contracts in participation of giant oil companies like BP, Shell, Total, Eni, …
50 new oil projects were introduced to foreign investors; 15 starting from exploration phase. New IPCs try to create a win-win situation: flexibility, long-standing and production-influenced profitability are the encouraging means.
However details should follow, but Iran seems determined in giving up the “buy-back” contracts and using new models.
In 2012 Iran produced 1 mb/d, which now plans to reach 5 mb/p by 2020. Whether it comes true, we have to wait and see.


Steel struggles for revival
Statistics for stocked steel in Iranian depositories goes from 1.6 million Tons up to 3 mT. Although the difference is huge but one thing is clear: Iranian Steel Industry is experiencing its toughest days.
Now the Government offers “Tax Rebate” on exported products, but Iranian prices do not seem to be much competitive on Global scale.
Others suggest that by delegation of Civil Engineering Projects to private sector, the Government could reanimate the Steel Industry.
In 2014, Iran produced 16 mT steel, using 70% of all its installed capacities. Maintenance of 30% non-utilized capacity is a factor for high prices.