As per the new eased norms, the steel industry can resume production on Mondays and Tuesdays from midnight till 8 am the next day operating at 50% of their total electricity consumption. However, for the balance period of the day and up to midnight, the mills can operate using only 10% of the power they actually require.
From Wednesday to Sunday, the mills can continue with their production at all hours of the day and night but only drawing 50% of the total power they require from the grid.
Domestic, export sales impacted
Power outages have been plaguing steel and other industries in this Middle Eastern country, on a reported lack of investment in new power generation capacities that left demand outstripping supply by around 11,000 MW, it is heard.
The Iran Power Generation, Distribution and Transmission Company had recently ordered steel and cement factories to reduce power consumption by 10% or else they faced cut-off in supply.
Power outages have impacted production and exports for the world’s tenth-largest steel producer and globally one of the largest billets exporters. Consequently, some billet export tenders recently lapsed into negotiation mode while export prices also rallied on scarce supply from $620/t levels in mid-July to $650-655/t in more recent deals
Electricity issues impacted the domestic market too with no trade happening on the Iran Mercantile Exchange last week. The average base price for billets also rose to 165,573 Rial last week from 132,462 Rial in the week before.
Outlook
It is expected that power outages may continue to plague the country till Aug’21. However, the easing of restrictions is a positive step towards boosting the country’s steel production, which has been considerably disrupted of late.
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