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Iran's Industrial Output Dramatically Dropped in 2018


Photo showing production of rails at Isfahan's metal works complex. File photo

A new report filed by the Islamic Republic Ministry of Industry, Mines, and Trade (MIMT) shows a dramatic drop in Iran's industrial output in 2018.

Based on the Ministry's 153-page report published on Monday, June 3, the production of various industrial commodities, including TV sets, refrigerators, washing machines, air conditioners, vehicles, petrochemical and aluminum products have significantly dropped.

Production Of Home Appliances In Iran
Production Of Home Appliances In Iran

Nonetheless, the output of some metal products, such as iron and copper, has increased.

U.S. sanctions early last May targeted the Islamic Republic's vital steel, aluminum, copper and iron industries. Exporting and repatriating the proceeds has become a herculean task for Iran, while sanctions also hurt the import of vital machinery parts and some raw materials needed for industrial production.

MIMT's latest report also has disclosed that manufacturing of passenger sedans; the bulk of the production of the auto industry in Iran, also shows a 38% drop in 2018 compared with the previous year. The number of sedans made in Iran, the report notes, dropped to less than 884,000 units last year.

Furthermore, the number of other vehicles, including tractors and harvesters manufactured in Iran, has also fallen.

Petrochemical products constitute 25% of Iran's non-oil exports; the report discloses, showed a 1.3% drop, limiting the volume to 52.8 million tons. However, several years ago, the Islamic Republic had boasted of implementing a plan to double the volume of Iran's petrochemical products in 2021.

The same claim was made again last week, with a new target date of 2024.

In total, MIMT's report concludes that Iran exported $32.3 billion of industrial products, including agricultural, petrochemical, liquid gas and natural gas condensates, in 2018.

Iran's Export Of Petrochemical Products
Iran's Export Of Petrochemical Products

In the same period, the country's rugs, natural gas condensates, and mineral exports dropped 34%, 30%, and 34.5% respectively.

In the meantime, based on the annual report of the Industrial Development and Reconstruction Organization of Iran (IDRO), Tehran has exported nearly $3.9 billion of iron and its alloys in the last Iranian calendar year (ended March 20, 2019), while it also exported almost $700m of copper, as well as more than $840m iron ore.

Fourteen percent of Iran's non-oil exports are industrial metals, IDRO says.

Iran's domestic metal industry includes a dozen steel mills, mainly state-owned, with about 50,000 workers. Of the 25 million tons of steel produced, Iran exports over 30%, earning nearly $4 billion per year. Its top markets have been Thailand, the United Arab Emirates, Iraq, and Indonesia, according to the U.S. Commerce Department.

About 3,000 factories and workshops produce goods for Iran's domestic market ranging from kitchen utensils and building frames to offshore oil rigs and military vehicles. It also feeds into Iran's domestic car manufacturing plants; AP reported last May.

Metal-related industries employ about 10 percent of the country's 22 million workers, a report by Iran's parliament recently said. How the sanctions will affect Iran's miners remains unclear. About 6 percent of its 8,840 mines produce raw materials such as iron, copper, and aluminum.

U.S. sanctions on Iranian oil and metal exports have left Iran struggling to compensate for its losses with other exports – these followed Washington's withdrawal from the nuclear dear, 2015's Joint Comprehensive Plan of Action, last year.

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