Iran's current annual steel production exceeds 30 million tons, primarily producing flat products, long products, and pipes. However, high-end steel still needs to be imported. Additionally, Iran's mining output of copper, zinc, and chromite ranks among the highest in the world, with its zinc reserves being the largest globally, providing strong support for the development of its metallurgical industry.
The Middle East is renowned globally as a major oil-exporting region due to its abundant petroleum resources. Driven by the oil industry, its construction, finance, and other sectors have also developed. However, for a long time, the steel industry foundation in the Middle East was relatively weak, with steel demand largely dependent on imports, which to some extent hindered the development of national industries in these countries.
In recent years, the situation has changed significantly. Countries in the Middle East, represented by Iran, have invested substantial petrodollars into their steel industries, stimulating rapid growth and establishing themselves as rising stars in the Middle Eastern steel sector.
In the early 1990s, Iran invested heavily to revitalize its steel industry. Leveraging Japan's advanced technology, equipment, and management methods, it accelerated the modernization of old plants and the construction of new ones, leading to the rapid rise of its steel industry. Crude steel production surged dramatically from 1.425 million tons in 1990 to 2.937 million tons in 1992, achieving an astounding annual growth rate of 43.56%. This made Iran the fastest-growing steel producer in the world during that period. In both 1991 and 1992, it surpassed Saudi Arabia, ranking first in steel production in the Middle East.
National Iranian Steel Company (NISCO)
The National Iranian Steel Company is the country's primary steel enterprise, encompassing all domestic pig iron and crude steel production. It oversees four steel plants and one independent rolling mill: Esfahan Steel Plant, Ahvaz Steel Plant, Mobarakeh Steel Plant, the National Steel Industrial Group, and the Kaviria Plate Mill.
1. Esfahan Steel Plant
Commissioned in 1973 with an initial annual crude steel capacity of 600,000 tons, this plant is Iran's only steel enterprise using the blast furnace–basic oxygen furnace (BF–BOF) process. Plans were made to expand its annual production capacity to 5 million tons by 1998. To this end, NISCO contracted with Nippon Steel Corporation and Sumitomo Metal Industries, investing $50 million for a complete revamp of the converter shop. Three 130-ton top–bottom combined blown converters were scheduled to arrive in Esfahan in October of that year (implied 1993 context) and commence operation by the end of 1994. Danieli recently supplied two billet continuous casters. Concurrently, Nippon Steel and other companies were set to bid on a project to expand the capacity of two blast furnaces (from 1,033 m³ to 1,800 m³). Following this modernization, the plant's annual crude steel production capacity was expected to reach 2.5 million tons per year.
Another major project at Esfahan Steel Plant was a turnkey contract undertaken by Italy's Danieli Company. This primarily involved constructing a new BOF steelmaking shop with an annual capacity of 3.7 million tons of steel, a slab continuous caster, and a compact hot strip mill with an annual capacity of 2.1 million tons, designed using Danieli's patents. This project enabled Esfahan Steel Plant to produce hot-rolled sheets for the first time. The entire project was expected to be completed by 1995, with a contract value of $660 million.
2. Mobarakeh Steel Plant
This is Iran's newest integrated steel plant, completing a full production line from iron ore processing to cold-rolled sheets upon its expansion in 1992. With the commissioning of the last two of its five MIDREX Series 60 direct reduction furnaces, the plant achieved an annual direct reduced iron (DRI) production capacity of 3.2 million tons, supplying feedstock for eight 180–200 ton electric arc furnaces (EAFs), allowing it to reach full production capacity. The Mobarakeh plant also included a 4.5 million tons-per-year pelletizing plant. Initially relying on iron ore imports from Brazil, the subsequent discovery of significant Gole Gohar iron ore deposits in southern Iran and new deposits in the central region meant these local sources would become the plant's main iron ore base in the future.
Irsa Technology supplied the plant with four Demag-designed twin-strand slab casters, with a total design capacity of 2.7 million tons of slabs per year. These casters initially supplied 75% of the feedstock for the hot strip mill that came on stream in 1992. This hot strip mill can produce hot-rolled sheets with widths ranging from 550 to 1850 mm and thicknesses from 1.5 to 16 mm, with a design annual capacity of 2.5 million tons. In 1992, the cold strip mill was commissioned, producing Iran's first cold-rolled sheet.
3. Ahvaz Steel Plant
Located in the town of Ahvaz near the Iran-Iraq border, this plant produces steel billets using the direct reduction furnace–electric arc furnace (DRF–EAF) route, with an annual production capacity of 1.5 million tons of large slabs and billets. Following the commissioning of three HYL I direct reduction furnaces and a third MIDREX direct reduction furnace, the plant was expected to achieve an annual DRI production capacity of 2.5 million tons.
4. National Steel Industrial Group
Also situated in Ahvaz, this group comprises several smaller enterprises primarily producing bars, wire rods, sections, seamless pipes, and welded pipes. Its rolling capacity exceeds its steelmaking capacity by 360,000 tons per year, necessitating the input of some billets from the Ahvaz Steel Plant. The group planned to expand its crude steel production capacity to 620,000 tons per year and its rolling capacity to 1.2 million tons per year. Additionally, it intended to build a new 540,000 tons-per-year billet caster to reduce its reliance on purchased billets and eventually achieve a balance between steelmaking and rolling capacities, forming an integrated production capability.
5. Other Projects
Beyond focusing on carbon steel plants, Iran is also committed to building special steel plants. Recently, NISCO entered into a management agreement with Mitsubishi Corporation for a turnkey project undertaken by Danieli in Yazd to construct a special steel plant with an annual capacity of 140,000 tons. This plant primarily produces bearing steels, spring steels, and free-cutting steels for the automotive, petroleum, and general engineering industries. The contract was valued at $500 million, with production scheduled to start in 1995.
In June 1996, Italy's Italimpianti (part of the FATA group, but here referring to the metallurgical equipment division context, possibly INNSE or similar, but often translated generically; using "Italian Metallurgical Equipment Group" as placeholder for the specific company mentioned, likely referring to a consortium or company like Danieli or Techint) secured an order from Iran to supply equipment for a 250,000 tons-per-year stainless steel plant in Esfarayen. ABB served as the main contractor, responsible for supplying two 50-ton EAFs, while Demag constructed the slab caster. The plant was designed primarily to supply slabs to large rolling mills and for export to other countries.
21st Century Developments and Current Status
Entering the 21st century, Iran's steel production capacity continued to increase. As of 2025, Iran's crude steel production stands at approximately 31 million tons per year, accounting for over 50% of the total production in the Middle East and ranking as the world's 10th largest steel producer. The country is home to nearly a hundred steel plants, including:
Mobarakeh Steel Company: Annual capacity of 11.8 million tons, representing ~50% of national output. It primarily produces flat products for the automotive industry (over 95%).
Esfahan Steel Company: Annual capacity of 3.6 million tons. It is the only company operating large blast furnaces and leads in long products and structural steel production.
Khouzestan Steel Company: Annual capacity of 3.6 million tons, focusing on hot-rolled coils and coated sheets.
Emerging Capacity: Companies like Zisco (Zarand Iranian Steel Company) commissioned a 1.7 million tons-per-year blast furnace and BOF steelmaking shop in 2021, gradually increasing their market share.
Regional Distribution of the Steel Industry:
Central Region (Isfahan, Yazd): Concentrates ~60% of national capacity, leveraging iron ore resources and cheap natural gas.
Southern Coastal Area (Khuzestan): Home to export-oriented capacity, utilizing port logistics advantages to serve Middle Eastern and Asian markets.
Northwest: Agglomeration of small, outdated capacities, suffering from significant equipment aging due to lax regulation.
Iranian steel industry's biggest advantages are its low raw material costs: iron ore mining costs approx. $35/ton (global average ~$45), and natural gas price is $0.03/cubic meter (global average ~$0.12). About 90% of its exports are semi-finished steel products (billets, slabs), targeting lower-end markets in Central Asia, Southeast Asia, and Africa, resulting in low added value.
Iran's steel industry, leveraging its resource endowment and DRI process advantages, holds an important position in the global steel chain. However, its progress towards higher-value products is slow due to technology blockades, energy shortages, and cyber security threats. Future breakthroughs in the global steel market will depend on overcoming technological bottlenecks through international cooperation and unlocking domestic demand potential through infrastructure projects (e.g., railway and power grid construction).
Iran's current annual steel production exceeds 30 million tons, primarily producing flat products, long products, and pipes. However, high-end steel still needs to be imported. Additionally, Iran's mining output of copper, zinc, and chromite ranks among the highest in the world, with its zinc reserves being the largest globally, providing strong support for the development of its metallurgical industry.
The Middle East is renowned globally as a major oil-exporting region due to its abundant petroleum resources. Driven by the oil industry, its construction, finance, and other sectors have also developed. However, for a long time, the steel industry foundation in the Middle East was relatively weak, with steel demand largely dependent on imports, which to some extent hindered the development of national industries in these countries.
In recent years, the situation has changed significantly. Countries in the Middle East, represented by Iran, have invested substantial petrodollars into their steel industries, stimulating rapid growth and establishing themselves as rising stars in the Middle Eastern steel sector.
In the early 1990s, Iran invested heavily to revitalize its steel industry. Leveraging Japan's advanced technology, equipment, and management methods, it accelerated the modernization of old plants and the construction of new ones, leading to the rapid rise of its steel industry. Crude steel production surged dramatically from 1.425 million tons in 1990 to 2.937 million tons in 1992, achieving an astounding annual growth rate of 43.56%. This made Iran the fastest-growing steel producer in the world during that period. In both 1991 and 1992, it surpassed Saudi Arabia, ranking first in steel production in the Middle East.
National Iranian Steel Company (NISCO)
The National Iranian Steel Company is the country's primary steel enterprise, encompassing all domestic pig iron and crude steel production. It oversees four steel plants and one independent rolling mill: Esfahan Steel Plant, Ahvaz Steel Plant, Mobarakeh Steel Plant, the National Steel Industrial Group, and the Kaviria Plate Mill.
1. Esfahan Steel Plant
Commissioned in 1973 with an initial annual crude steel capacity of 600,000 tons, this plant is Iran's only steel enterprise using the blast furnace–basic oxygen furnace (BF–BOF) process. Plans were made to expand its annual production capacity to 5 million tons by 1998. To this end, NISCO contracted with Nippon Steel Corporation and Sumitomo Metal Industries, investing $50 million for a complete revamp of the converter shop. Three 130-ton top–bottom combined blown converters were scheduled to arrive in Esfahan in October of that year (implied 1993 context) and commence operation by the end of 1994. Danieli recently supplied two billet continuous casters. Concurrently, Nippon Steel and other companies were set to bid on a project to expand the capacity of two blast furnaces (from 1,033 m³ to 1,800 m³). Following this modernization, the plant's annual crude steel production capacity was expected to reach 2.5 million tons per year.
Another major project at Esfahan Steel Plant was a turnkey contract undertaken by Italy's Danieli Company. This primarily involved constructing a new BOF steelmaking shop with an annual capacity of 3.7 million tons of steel, a slab continuous caster, and a compact hot strip mill with an annual capacity of 2.1 million tons, designed using Danieli's patents. This project enabled Esfahan Steel Plant to produce hot-rolled sheets for the first time. The entire project was expected to be completed by 1995, with a contract value of $660 million.
2. Mobarakeh Steel Plant
This is Iran's newest integrated steel plant, completing a full production line from iron ore processing to cold-rolled sheets upon its expansion in 1992. With the commissioning of the last two of its five MIDREX Series 60 direct reduction furnaces, the plant achieved an annual direct reduced iron (DRI) production capacity of 3.2 million tons, supplying feedstock for eight 180–200 ton electric arc furnaces (EAFs), allowing it to reach full production capacity. The Mobarakeh plant also included a 4.5 million tons-per-year pelletizing plant. Initially relying on iron ore imports from Brazil, the subsequent discovery of significant Gole Gohar iron ore deposits in southern Iran and new deposits in the central region meant these local sources would become the plant's main iron ore base in the future.
Irsa Technology supplied the plant with four Demag-designed twin-strand slab casters, with a total design capacity of 2.7 million tons of slabs per year. These casters initially supplied 75% of the feedstock for the hot strip mill that came on stream in 1992. This hot strip mill can produce hot-rolled sheets with widths ranging from 550 to 1850 mm and thicknesses from 1.5 to 16 mm, with a design annual capacity of 2.5 million tons. In 1992, the cold strip mill was commissioned, producing Iran's first cold-rolled sheet.
3. Ahvaz Steel Plant
Located in the town of Ahvaz near the Iran-Iraq border, this plant produces steel billets using the direct reduction furnace–electric arc furnace (DRF–EAF) route, with an annual production capacity of 1.5 million tons of large slabs and billets. Following the commissioning of three HYL I direct reduction furnaces and a third MIDREX direct reduction furnace, the plant was expected to achieve an annual DRI production capacity of 2.5 million tons.
4. National Steel Industrial Group
Also situated in Ahvaz, this group comprises several smaller enterprises primarily producing bars, wire rods, sections, seamless pipes, and welded pipes. Its rolling capacity exceeds its steelmaking capacity by 360,000 tons per year, necessitating the input of some billets from the Ahvaz Steel Plant. The group planned to expand its crude steel production capacity to 620,000 tons per year and its rolling capacity to 1.2 million tons per year. Additionally, it intended to build a new 540,000 tons-per-year billet caster to reduce its reliance on purchased billets and eventually achieve a balance between steelmaking and rolling capacities, forming an integrated production capability.
5. Other Projects
Beyond focusing on carbon steel plants, Iran is also committed to building special steel plants. Recently, NISCO entered into a management agreement with Mitsubishi Corporation for a turnkey project undertaken by Danieli in Yazd to construct a special steel plant with an annual capacity of 140,000 tons. This plant primarily produces bearing steels, spring steels, and free-cutting steels for the automotive, petroleum, and general engineering industries. The contract was valued at $500 million, with production scheduled to start in 1995.
In June 1996, Italy's Italimpianti (part of the FATA group, but here referring to the metallurgical equipment division context, possibly INNSE or similar, but often translated generically; using "Italian Metallurgical Equipment Group" as placeholder for the specific company mentioned, likely referring to a consortium or company like Danieli or Techint) secured an order from Iran to supply equipment for a 250,000 tons-per-year stainless steel plant in Esfarayen. ABB served as the main contractor, responsible for supplying two 50-ton EAFs, while Demag constructed the slab caster. The plant was designed primarily to supply slabs to large rolling mills and for export to other countries.
21st Century Developments and Current Status
Entering the 21st century, Iran's steel production capacity continued to increase. As of 2025, Iran's crude steel production stands at approximately 31 million tons per year, accounting for over 50% of the total production in the Middle East and ranking as the world's 10th largest steel producer. The country is home to nearly a hundred steel plants, including:
Mobarakeh Steel Company: Annual capacity of 11.8 million tons, representing ~50% of national output. It primarily produces flat products for the automotive industry (over 95%).
Esfahan Steel Company: Annual capacity of 3.6 million tons. It is the only company operating large blast furnaces and leads in long products and structural steel production.
Khouzestan Steel Company: Annual capacity of 3.6 million tons, focusing on hot-rolled coils and coated sheets.
Emerging Capacity: Companies like Zisco (Zarand Iranian Steel Company) commissioned a 1.7 million tons-per-year blast furnace and BOF steelmaking shop in 2021, gradually increasing their market share.
Regional Distribution of the Steel Industry:
Central Region (Isfahan, Yazd): Concentrates ~60% of national capacity, leveraging iron ore resources and cheap natural gas.
Southern Coastal Area (Khuzestan): Home to export-oriented capacity, utilizing port logistics advantages to serve Middle Eastern and Asian markets.
Northwest: Agglomeration of small, outdated capacities, suffering from significant equipment aging due to lax regulation.
Iranian steel industry's biggest advantages are its low raw material costs: iron ore mining costs approx. $35/ton (global average ~$45), and natural gas price is $0.03/cubic meter (global average ~$0.12). About 90% of its exports are semi-finished steel products (billets, slabs), targeting lower-end markets in Central Asia, Southeast Asia, and Africa, resulting in low added value.
Iran's steel industry, leveraging its resource endowment and DRI process advantages, holds an important position in the global steel chain. However, its progress towards higher-value products is slow due to technology blockades, energy shortages, and cyber security threats. Future breakthroughs in the global steel market will depend on overcoming technological bottlenecks through international cooperation and unlocking domestic demand potential through infrastructure projects (e.g., railway and power grid construction).
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