Zagros Eslamabad, who had already lost to Kuwait SC and Qatar’s Al-Arabi, was defeated against Al-Sharja of the UAE 31-24.
The Iranian team will face SK Hawks of South Korea in Group A on Tuesday.
Foolad Mobarakeh also lost to Oman 31-24 In Group B.
Foolad had started the competition with a loss against Qatar's Al-Wakrah and was also defeated against Al-Wehdah of Saudi Arabia.
Foolad will meet Al-Arabi of Kuwait on Sunday.
The competition is being held in Samcheok, South Korea from November 7 to 17.
The Asian Handball Club League Championship is the official competition organized by Asian Handball Federation for the men's handball clubs of Asia, and takes place every year.
In addition to crowning the Asian champion, the tournament also serves as a qualifying tournament for the IHF Super Globe.