Key insights
- Barclays reports Iranian steel production disruption due to airstrikes. While direct impact is limited by existing underutilization, increased Middle East reliance on Chinese steel imports is expected. This shift could marginally support global blast furnace utilization and demand for iron ore and coking coal, indirectly benefiting related US companies.
Investing.com -- Recent airstrikes targeting critical industrial infrastructure in Iran have disrupted production at two of the country’s largest steel facilities, according to a new equity research report from Barclays.
The attacks on the Mobarakeh and Khuzestan plants, followed by Tehran’s threats of retaliatory strikes against Gulf and Israeli steelmakers, have introduced fresh volatility into regional metal markets.
However, analysts suggest the immediate impact on global supply may be contained due to existing logistical bottlenecks and underutilized capacity.
The Mobarakeh and Khuzestan plants represent less than 20% of Iran’s total steel capacity. Given that national utilization rates were already below 50% before the strikes, Barclays notes that Iranian production could theoretically recover quickly by shifting output to unaffected domestic sites.
The more pressing concern for the broader region lies in the Gulf Cooperation Council (GCC) countries.
Approximately 65% of GCC steel capacity (excluding Iran) was already facing operational headwinds due to its heavy reliance on the Strait of Hormuz for raw material imports. Because the "Hormuz factor" had already throttled output, Barclays argues that direct military strikes on GCC plants would have a limited incremental impact on actual production levels.
As domestic capacity remains under threat, the Middle East is expected to increase its reliance on international markets to bridge the supply gap. The GCC is already a major net importer of steel, with China currently supplying over 60% of its imports.
Analysts expect the dependency to deepen, potentially driving higher blast furnace utilization rates globally to meet the shortfall.
The direct implications for European markets are considered minimal. However, the regional shift in trade flows is expected to support demand for iron ore (IO) and hard coking coal (HCC).
Middle Eastern buyers looking to secure finished steel from Asian exporters could lead to the global pricing for the above raw materials incurring a "war-risk" premium sustained through the second quarter of 2026.