The Impact of Domestic Resource Cost on the Comparative Advantages of Iran Crude Steel Sector

Steel is fundamental material for many industries that could produced by blast furnace (BF) and direct reduced Iron technology (DRI) .these two technologies differ from each other in term of difference of production cost, energy consumption, investment and environment issues. The purpose of this paper is to investigate comparative advantages of these two technologies by using domestic resource cost (DRC) method. It provides a comparison between the domestic costs to produce a specific good with its value added at international prices, which was done by Mckay (1999), DHEHIBI (2009), Ruiz (2003) and Bonjec (2002). The result suggests that that although both two technologies have its own comparative advantages, the blast furnace method (BF) would be more preferable than direct reduced Iron technology (DRI).