Planning and Budgeting

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On the basis of Iran’s National 20-Year Development Outlook, it is considered a must to develop infrastructural steel industry. Evidently, planning for meeting the domestic needs seriously requires focused technical and economic studies. In this way, identifying and projecting Iran’s raw steel demand pattern are regarded of infrastructural importance and priority for any production program. Therefore, in this study, two models for raw steel consumption are estimated according to “trends of variables continuation” scenario, based on 3rd plan as well as according to “goals accomplishment of 4th, 5th, and 6th plans” scenario so as to predict Iran’s raw steel consumption in 2021. These two models make use of “Intensity of Use” method with two differing approaches to predict Iran’s raw steel consumption. The first Model uses the “income” variable to predict and estimate Iran’s Raw steel consumption amount in the classical “consumption function” context and private and state investment as two indicators of “economic structure change” and “government’s performance impact”. The second model, estimates raw steel consumption from the sectors’ point of view this model considers the performance of the major steel-consuming sector, i.e. petroleum, industry, mines and construction. According to the findings of these models, raw steel consumption in 2021 will be 55.7 and 45.8 million tons respectively providing that goals of 4th and 5th Development Plans are achieved. Meanwhile, according to these two models, the amounts are predicted to be 44.7 and 41 million tons if the variables growth trend would be according to 3rd Development Plan.

Keywords: Steel Consumption, VAR, Intensity of Use, Econometrics, Demand Predication

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