05/16/2025 16:43:40 UTC | Feature
Author Fast Webs; Staff<.> | EN

* Only few steel HS codes benefit from tariff elimination
* Customs duties on base metals kept unchanged
* If Iran’s steel industry grows, it may need Russian iron ore

A full-fledged free trade agreement between the Eurasian Economic Union [comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia] and Iran came into effect on May 15, a spokesperson for the Eurasian Economic Commission told Platts, part of S&P Global Commodity Insights.
The temporary agreement, in effect since 2019, covered a limited range of products. In contrast, the new accord solidifies mutual tariff commitments, granting the partners preferential access to 90% of the goods and commodities exchanged between them.
Since Iran is not a member of the WTO it has historically charged some of the highest import tariffs globally, but now, the duties applied by Iran to products from Russia and its Eurasian Union partners will fall to 4.5%, from 20% previously.
Under the previous interim agreement, Iran still charged most-favored nation (MFN) rates of 15% and 20% of the customs value of certain semi-finished iron products and certain types of rolled steel, respectively, while its MFN duties for copper ranged from 55% to 59%, according to the commission’s spokesperson.
Overall, Iran’s previous import duties on iron and steel ranged between 5% and 26%, depending on the form and origin.
Now, the country’s imports of seamless steel pipes, welded pipes of large diameters, hollow profiles, and pipe fittings originating in the Eurasian Economic Union are eligible for tariff exemptions, while imports of cast iron pipes and profiles are eligible for preferential tariffs, although their exact level is not specified, according to a source familiar with the document issued by the Iranian authorities.
Despite the agreement being seen as an achievement, many of the steel-related tariffs remain unchanged. The agreement had been approved by key steel companies in Iran before being finalized, and it doesn’t cover all steel products: import duties on items like I-beams, rails, rebars and wire rods remain high, at MFN rates, as some domestic production is still protected, noted the source.
Other market participants surveyed by Platts mentioned that Iran is not a big importer of steel anyway as it is nearly self-sufficient in the ferrous metal; they did not get the sense that major local steel producers are particularly concerned by the free-trade agreement, and specifically by competition with imports, since their main products have been excluded from the list of now duty-free items.
Iran is doing well with self-provision of steel; the country has built a self-sufficient industry, a Moscow-based analyst who wished to remain anonymous told Platts. The agreement will bring no breakthroughs [in terms of jumps in trade volumes], he reckons.
In its past calendar year (late March 2024 through late March 2025), Iran imported 1.48 million mt of rolled steel, with flats accounting for a substantial 96% of the total volume, according to Iranian Steel Producers Association. Most of Iran’s flat-rolled steel imports consist of thin coils that fall outside the production range of domestic manufacturers and that are primarily imported from Russia and Kazakhstan.
The agreement is still expected to impact the final cost of flat steel products to end-users, which is seen as good news for downstream industries. Also, Iran currently does not import iron ore, but if its steel industry expands further, it might need to do so, and as an iron ore supplier, Russia would be an option, some sources noted.
When it comes to base metals, Iran is an exporter, except for bauxites, which it imports. Aluminum, copper, zinc, and nickel are not covered by any preferential tariff reductions or exemptions under the new agreement, and their import duties remain at the standard MFN levels, typically ranging from 5% to 15%, according to existing Iranian customs regulations.
Iran produces around 650,000 mt of aluminum and aims to produce 1 million mt, according to an industry source, who wished to remain unnamed.