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Steel sanctions cut deep into Iran's economy

Published on Nov 11, 2012 3:23 PM

LONDON (REUTERS) - Iranian manufacturers and builders face serious shortages of steel and other metals as a new European Union export ban adds to troubles for an economy already reeling from sanctions on its finances and oil exports.

Reliant on imports to make up a shortfall in its own steel production, data shows Iran's purchases of foreign steel already falling as buyers are being hit by EU and US measures which hinder banks, insurers and others supporting trade with Tehran until Iran agrees to alter its nuclear programme.

Short of major currencies, some Iranian steel buyers have resorted to barter deals. But explicit sanctions imposed by the European Union on Oct 15 on sales of steel, aluminium and other key materials have prompted some traders to halt all sales and Iranian businesses now face rising prices and scarce supply.

Given steel's central role in the economy, in the skeletons of new buildings or for constructing machinery, disruption to trade in the metal may cause far-reaching damage, exactly the aim of the Western powers who want to prevent Iran developing nuclear weapons and reject its denials that it has any such aim.

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