By Stuart Burns
Not content with putting the squeeze on Iran's oil industry, President Donald Trump signed a new executive order last week extending existing sanctions to include Iran's metal industry.
According to the Financial Times, much of Iran's non-oil income comes from metal exports, including $4.2 billion from the sale of steel and a further $917 million from copper and its downstream products.
Much of Iran's metals industry is in the hands of its Revolutionary Guards - not ones to miss a profit, the country has ambitious plans to grow its steel and aluminum manufacturing capacity.
The country's 2025 vision plan seeks to make Iran the world's sixth-largest steelmaker by increasing production capacity from 31 million metric tons in 2017 to 55 million metric tons by 2025. The Financial Times goes on to say Iran has three greenfield primary aluminum smelters either under construction or recently completed.
The Salco smelter in Asaluyeh is due to come on stream this year with a capacity of 300,000 tons and is being funded by the China Nonferrous Metal Industry's Foreign Engineering and Construction Company, a state enterprise.
Historically, Iran has not been a net exporter of aluminum, but the new smelters will change all that. Currently, the lion's share of industrial metal exports come from the steel industry, with almost 79% total exports by value. Copper is second with 12%, but aluminum is set to grow dramatically from the turn of the decade.
Some immediate sources explain the enhanced sanctions in connection with steel, aluminum and copper used in the production of ballistic missiles and uranium enrichment centrifuges. In reality, the sanctions are all about squeezing Iran financially in an attempt to drive it to the negotiating table with a view to curtailing the country's regional role in fermenting unrest. According to intellinews.com, the sanctions have thrown Iran back into recession while causing a collapse in the value of the Iranian rial and driving up inflation.
How successful this latest escalation of sanctions proves to be remains to be seen, but the results could be a long time coming. Previous sanctions took years to drive Iran to the negotiating table and were better supported by the global community.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.