IRNA – Indian traders are still interested in importing steel from Iran in spite of the US sanction, a leading Indian newspaper reported.

Business Line newspaper wrote in its report that Indian traders prefer Iranian steel because it is heavily discounted.

The first consignment of steel imports from Iran is expected in two tranches of 32,000 tonnes and 50,000 tonnes from Bandar Imam Khomeini port and would be discharged at Nhava Sheva and Kandla ports in next few days, sources said to Business Insider.

In order to circumvent import restriction due to sanctions, the paper work is being routed through Dubai and line of credit is opened in euro or United Arab Emirates Dirham (AED).

Iranian mills are pricing steel lower than Chinese mills and are offering a discount of about 85 dollars a ton compared to global benchmarks, the Indian newspaper said in its report.

Though India is exempted from importing oil from Iran under US sanctions, it cannot trade in any other commodities.

Explaining the modus operandi, sources said a trader with an office in Dubai procures steel products from Iranian mills and raises a bill with loading port as Jebel Ali. The certificate of origin for the material is shown as Dubai even though there are no steel mills there.

The Indian customs does not check such minute details. Once the material lands in India, payment is credited in euros in an European bank.

Flood gates of cheap imports from Iran are expected to open once imports in small quantity succeeds.

Iran has a steel production capacity of 34 million tonnes per year. It has set a target to achieve an annual production capacity of 55 million tonnes and export about 25 million tonnes a year by 2025.

The World Steel Association has ranked Iran as the world's 11th biggest steel producer.