Iran Makes the World's Cheapest Rebar: It Exports an Energy Subsidy, While Its Steel Ticker Has Been Frozen for 146 Days (Friday, 24 July 2026)
Ex-works rebar in Iran runs about $365 a ton: cheaper than China, under half of Germany, a third of the US, not from productivity but from cheap gas and power melted into steel and partly shipped abroad. Iran supplies about a quarter of the world's direct-reduced iron and near 11% of the semi-finished steel trade, big enough that a Hormuz disruption lifted German rebar prices. Meanwhile the Foolad and Fakhouz tickers have been frozen since 28 February 2026. Not buy or sell advice.
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Today, Friday 24 July 2026 (2 Mordad 1405), Arian Foolad A3 size-10 rebar is quoted ex-works at 70,450 tomans per kilogram. At the free-market dollar rate of 193,115 tomans in the Sahmino price feed, that works out to roughly $365 a ton. At the same moment, rebar trades at about $460 to $480 in China, $740 to $800 in Germany, and around $1,011 in the United States.
In other words, Iran sells rebar more cheaply than China does. That sentence sounds like an industrial triumph. It is not. This report explains why that cheapness is not the product of efficiency, where it is financed from, and why, at the very moment Iran's steel is large enough that its absence pushes German rebar prices up, an Iranian shareholder has been unable to trade a share of Mobarakeh Steel for 146 days. This analysis is not buy or sell advice.
The number that starts the story
A side-by-side of rebar prices puts Iran on the bottom rung of the ladder:
| Market | Rebar ($/ton) |
|---|---|
| Iran (24 July 2026) | about 360 to 365 |
| China | 460 to 480 |
| India | about 509 |
| Taiwan | 594 to 737 |
| Germany | 740 to 800 |
| Brazil | 907 to 942 |
| United States | about 1,011 |
The same pattern repeats in cement. Bulk Portland Type 2 cement from Tehran Cement is at 4,014,000 tomans a ton this week, roughly $21 a ton. By contrast, cement is reported at about $54 in China, $96 in the United States, $140 in the United Kingdom, and $250 in Germany.
Two methodological caveats worth recording honestly. First, the dollar conversions above are Sahmino's own calculation at today's free-market rate; if we instead use the Exchange Center remittance rate (151,368 tomans), the Iranian figures rise about 28%, and Iranian rebar reaches roughly $465, level with China. Which rate is correct? For an exporter who sells in dollars and pays costs in tomans, reality sits somewhere between the two. Second, the global prices come from pricing agencies for the first quarter and mid-months of 2026, and the reference dates do not line up exactly. The direction of the picture does not change, but the figures should be read as approximate.
Why so cheap? The answer is in the furnace
Iran's steel is produced mainly by the electric arc furnace route, not the blast furnace. The reason has been stated plainly: because they receive cheap gas and electricity, the country's steel plants shifted toward electric furnaces, and about 80% of the nation's steel is produced this way. This is not a neutral technical choice; it is an economic response to a price signal. When energy is cheap, you build energy-intensive industry.
The result shows up in the data: in 2025 Iran produced about 37 million tons of direct-reduced iron (DRI), close to a quarter of total world supply. DRI is the feedstock for those same electric furnaces, and its production is heavily dependent on gas. Put simply, Iran turns cheap gas into DRI, DRI into billet with cheap electricity, and exports the billet.
This is where the phrase "exporting an energy subsidy" becomes precise. A subsidy does not only burn in a fuel tank; it melts in a furnace and leaves the country by ship. The important difference is that a gasoline subsidy at least reaches a domestic consumer, whereas this portion, in the form of a price discount, is transferred to a foreign buyer.
How big? Big enough for Germany to feel it
The scale of this industry is usually underestimated:
- Crude steel output in January 2026: 2.6 million tons, up 15.1% year on year (World Steel Association)
- Annual steel-product output: more than 22 million tons (about 12.7 million tons of long products and 9.5 million tons of flat products)
- Annual iron-ore pellet output: more than 62 million tons
- Exports: about 4 million tons of finished steel and 7 to 8 million tons of semi-finished products a year, equal to roughly 11% of the global semi-finished steel trade (Wood Mackenzie estimate)
The real test of this claim came in Esfand 1404. With the start of military operations on 9 Esfand (28 February 2026) and the effective paralysis of the ports, this supply was removed from the world market. Lloyd's List Intelligence reported an 86% drop in traffic through the Strait of Hormuz in the days immediately after the conflict began.
The global market's reaction was immediate. The rebar price index in Germany rose about 6% quarter on quarter in the first quarter of 2026, and European mills applied surcharges of up to 30% on new orders. Market participants in India and China also warned of a tighter supply and upward price pressure in the second half of 2026.
This is the most important proposition of the analysis, and its logic is inverted but firm: the proof that Iran's cheap steel had been holding global prices down was the moment it was cut off and prices went up. The Omani buyer who purchased more than 418,000 tons of Iranian billet in the year to 30 Esfand 1404 was not simply buying from a cheap seller; it was buying a share of Iran's energy subsidy.
And at home: a plant with no power and a ticker that will not open
Now the other side of the equation. This very industry that makes a quarter of the world's DRI faces the following at home.
Power cuts and gas restrictions. Zones such as Sangan, which supply about a third of the country's steel-chain feedstock, are wrestling with multi-year-flat iron-ore prices alongside a multiplication of costs, power cuts, and gas restrictions. Older estimates put the cost of power cuts to the steel industry at 100 to 200 billion tomans a day; those figures are from earlier years and need updating, but the direction of the problem has not changed. Sahmino earlier reported the paralysis of Mobarakeh and Khouzestan steel output under the pressure of war and the power crisis.
In that frame, the latest news takes on meaning: by order of the president, and with the aim of preventing production stoppages and preserving employment, industrial power is set not to be cut in Mordad and Shahrivar. This is a two-month breather, not a fix for the imbalance.
And most important for shareholders: the frozen ticker. Based on official trading-system data that Sahmino queried directly today:
| Ticker | Status | Last trading day | Last closing price |
|---|---|---|---|
| Foolad (Mobarakeh Steel of Isfahan) | Suspended (mamnoo-motevaghef) | 9 Esfand 1404 | 2,604 rials |
| Fakhouz (Khouzestan Steel) | Suspended (mamnoo-motevaghef) | 9 Esfand 1404 | 2,012 rials |
Both tickers have been halted since 9 Esfand 1404, the very day the operations began. As of today, 2 Mordad 1405, that halt has lasted about 146 days. Sahmino previously wrote in its report on the 42 war-damaged tickers that these make up about 35% of the Tehran bourse's market value and were meant to stay closed through 31 Tir. That deadline has passed, and on the latest available data the tickers have still not reopened.
The practical meaning for a shareholder: Foolad's price of 2,604 rials is a figure frozen from Esfand, not today's value. Over these 146 days the dollar has gone from about 100,000 tomans to more than 193,000 tomans, and inflation has piled up. At what price and with what volume of supply these tickers reopen is one of the largest variables facing the Tehran Stock Exchange.
Summing up: three sentences that turn strange side by side
1. Iran supplies about a quarter of the world's DRI and close to 11% of the semi-finished steel trade, and sells the world's cheapest rebar.
2. That cheapness comes not from productivity but mainly from subsidized energy and a weakened rial, meaning part of Iran's energy subsidy is transferred to a foreign buyer.
3. At the same time, the mills of this very industry run under power cuts, and its shareholders have been unable to trade their shares for 146 days.
None of these three sentences is fresh news on its own. Placed side by side, though, they raise a serious policy question: is exporting an energy-intensive product made with subsidized energy, in a country that has its own power and gas imbalance, an optimal allocation of resources? The question has no simple yes-or-no answer. The other side argues that this industry creates jobs, earns foreign currency, and has built a domestic value chain; that argument is not baseless. But a debate without numbers is not a debate. The honest summary is one sentence: Iran makes the world's cheapest rebar, but the price of that cheapness is paid by subsidized energy and a waiting shareholder, not by productivity. This analysis is not buy or sell advice, and is merely a framework for seeing this industry from a less-discussed angle.
What to watch
- The reopening of the Foolad and Fakhouz tickers: the date, the discovered price, and the volume of supply. The single most important event ahead for the metals group.
- The state of industrial power after the two-month Mordad and Shahrivar reprieve ends.
- The gas feedstock rate for industry and any revision of the industrial electricity tariff; these move margins directly.
- The pace of the return of exports from the ports and Strait of Hormuz traffic data.
- Global rebar and billet prices, especially in China and Turkey, the direct export competitors.
- Daily domestic prices on the Sahmino steel page and events on the Sahmino calendar.
