Despite sometimes strained political ties, trade between the two neighbours has risen sharply over the past decade, with Turkey regarded by some as a possible weak link in international sanctions imposed on Iran over Tehran's suspected development of nuclear weapons.
Iran is Turkey's biggest export market for gold while Turkey is Europe's only remaining importer of Iranian oil.
Now traders say steel bound for Iran is on the rise, after plunging earlier this year as toughened US-led sanctions left Iranian buyers without access to major currencies.
"Turkish mills, mainly from the İskenderun region, have sold quite a lot and they have sold at a very good price level because of the massive, massive shortage in Iran, and because Iran can't pay for it any other way," a Turkish trader said.
Turkey's exports of steel for construction to Iran rose to 15,500 tonnes in May worth roughly $10 million versus just 4,300 tonnes in March, the latest data from the International Steel Statistics Bureau (ISSB) show.
Traders said the exports to Iran have continued to rise and have increased significantly in the past few weeks.
The higher trade between the two nations has come despite sometimes strained political relations, including after Tehran lent its support to Syrian President Bashar al Assad, while NATO member Turkey has sided with those backing the popular revolt.
Iran, with little production of its own, is one of the world's top importers of billet and rebar, used to reinforce concrete for construction.
Turkey has helped soothe Iran's heavy shortage of steel, handed a huge competitive advantage to its own makers versus producers in Russia, Ukraine and elsewhere, while boosting prices in the region to buck a negative trend in the sector globally.
Prices for Turkish steel billet have risen by about $25 to $575 per tonne on a free-on-board basis in the last two to three weeks, traders said.
Banks in traditional steel suppliers such as Turkey, Russia, Ukraine and Europe have withdrawn most financing facilities for deals with Iran, making it extremely difficult for producers and traders to do business with the Gulf country.
Yet traders said Turkey's banks, among them state-owned Halkbank, are accepting letters of credit from Iranian buyers.
"There is a facility in place which allows Turkish bank Halkbank, to receive funds from Iran, but only for material that is supplied from Turkey," said one UK-based steel trader.
"Consequently Turkey almost has a monopoly."
Halkbank general manager Suleyman Aslan, declined to comment on the issue.
The Turkish trader added that while Halkbank was accepting letters of credit from Iran, it was charging high fees to do so.
In addition to Turkish steel, Turkey's exports to Iran include the resale of steel billet bought from Russia and Ukraine.
This has been lucrative, especially for players in the Iskenderun region near the border with Iraq and Iran, which have been selling high volumes of billet at good prices to both of these countries, traders said.
"Turkey can buy cheap billet and sell it at higher prices to Iran because Turkish banks accepts Iranian letters of credit but that's not possible for Russia and Ukraine," said a Russian trader.
"That's why Turkey is making business right now alone. We have got a good price for Iran but we cannot sell directly; it's difficult. Russia's trade with Iran is not as good as you think, it's very complicated now."
Trade data from ISSB supports the traders' view, showing direct steel exports from Russia and Ukraine to Iran, which were at almost 60,000 tonnes a month last October, have fallen to zero more recently.
European steel sales to Iran were also near zero as even the few banks who had until recently helped with some financing have now tightened their policy, wary of retaliation that would negatively affect their business elsewhere.
"Forget about that! You can't finance through a European bank anymore," said the UK-based trader.