An Analysis of Production and Consumption of Steel and Economic Development

In any country the consumpt ion of steel is dir ectly rel at ed to th e level
of economic development. and for developing co untries it is regarded as
an important index for the evalu at ion of econo mic developmen t.
In the course of economic developmen, consumption rate tak e a
rapid acceleration but aft er passing through a peri od of susta ine d
st ability, to starts ti decline as the co untry ap proache s th e st age of
economic maturity. In other words. at the e arly st ages o f economic
de velopment the increasing level o r investme nt in th e indus tri al
infrastructur increases th e rate of consumption for steel but as the
co untry reaches th e technological advancement it wo uld give its place to Hight- Tech and valu e added of th e so ca lled "Pure Mind".
The Islamic Republic o f Iran is st ill pass ing through the early stages
o f economic development and the re fore is facing a growi ng dem and for steel du e to the increasing need lor infras tructural investme nts and
development of industrial capacities.
Presently it is hard to obtain a logical link between the steel
consumption and the industrial linkages. This is mostly due to the close
correlation which exists between the steel consumption and construction
industries, The problem has its roots in the dependent nature of Iranian
industries to that or major industrial powers form the time of its
format ion.
The models examined in this research intend to provide a clear view
or relations between the Consumption of Steel with Gross Domestic
Product. Formation of Fixed Investment and Value Added in industries
as well as the cunstruction industry. If the growth rates, as defined in the
2nd Five Year Development plan, are achived and sustained, based on
the domestic demand the country's steel consumption should rise to 13
million tons by the year 1385 (2006), excluding the demand from the
export markets.
In order to be able to respond to such a trend, the production should
rise by 600000 tons per year , Which compare with those of south East
Asian countries is still not at a satsifactory level. Moreover, it is unclear
whether this trend would help the country to hold it current position
worldwide.