Abstract
Iran has a great advantage in the development of the steel industry due to its access to mineral resources and energy, extensive consumer market, and low-cost labor. In this article, the Iranian steel value chain in 2014-2016 is studied using the value chain analysis and material flow analysis. Accordingly, based on the statistics related to the input and output of each echelon in the chain, the material flow is analyzed throughout the value chain. Then the total added value from the chain, the share of different stages, and the various costs in each echelon are calculated. According to the research findings, weakness in the development of transportation infrastructure and poor geographical distribution of value chain units has led to the deviation of production from nominal capacity and frequent imports/exports throughout the chain. On the other hand, the upstream industries have a permanent advantage that deeply roots in easy access to the minerals and lower costs in transportation and energy. Finally, the pricing of intermediate products based on the ratio of steel ingot prices is criticized, while wage conversion and commodity purification contracts are proposed as possible solutions for the reduction of overhead costs.