Iran will rebuild the Mobarakeh Steel complex at its original site in Isfahan, the industry ministry said on April 22, ruling out relocation to Bandar Abbas after the plant was damaged during the Israeli–US war that began on February 28, according to IRNA.

The decision affirms Tehran’s push to restore core industrial capacity in-situ after air strikes disrupted two of its largest steelmakers, tightening flat-steel supply and feeding price volatility across downstream sectors. According to those connected to the site in Isfahan speaking with IntelliNews, around 30% of the plant was destroyed in the US-Israeli attacks on the site. 

Ezzatollah Zarei, spokesperson for the Ministry of Industry, Mine and Trade, said planning for reconstruction was “underway”, covering design, timelines and financing, with execution to follow once finalised.

He dismissed reports of a coastal relocation, saying the complex would be rebuilt “at its previous site” in central Isfahan.

Mobarakeh Steel Company and Khuzestan Steel Company were hit repeatedly during the conflict, with strikes from late March inflicting heavy damage on key production lines. Output disruptions rippled through the automotive and construction supply chains, prompting emergency measures to reroute production and tap spare capacity.

Tehran has framed the response within its national land-use framework, which governs industrial siting based on water availability, environmental constraints and regional capacity.

Zarei said existing plants undergoing reconstruction or upgrades would not require new permits, allowing work to proceed without administrative delay.

Industry officials have moved in parallel to cushion the market. Shipments from Mobarakeh resumed on April 16, with “strategic” inventories released to cool inflated prices. Data from industry groups indicate sheet prices, which had climbed to around IRR1,300,000 ($0.84) per kilogramme in early April, have since fallen by IRR120,000–150,000 ($0.08–0.10) as supply returned.

Rasoul Khalifeh Soltani, a steel association member, said the domestic market could “rebalance” within two months, with imports used selectively to plug shortfalls. “In the short term, we can compensate,” he said, urging buyers to hold off purchases until conditions stabilise.

Iran produced about 31.8mn tonnes of crude steel in 2025. Mobarakeh, its largest producer, generated roughly $860mn in export revenue between March 2025 and January 2026, marking the strategic weight of a swift recovery.