An Analysis of Production and Consumption of Steeland 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.