The Iranian Steel Producers Association (ISPA) has urged for fair production planning across Iran’s energy sectors so that the steel mills are allowed to keep producing a minimum volume to meet domestic demand as well as essential export obligations.
ISPA has written to the Iranian government, saying that the curbs relating to the supply of electricity to the steel industry have caused heavy daily losses to the steel mills and the country’s economy. On average, more than 85% of active units had to shut down, which will definitely have adverse consequences on the domestic steel industry as well as the export market in the coming months.
The association has called for fair and balanced production planning across all energy sectors so that steel and cement industries are not made to bear the burden of electricity usage curbs alone.
In the letter, the steel association predicted that the unfortunate situation of electricity shortage will continue till the end of August. But, requested that, with fair planning, the domestic steel mills are allowed to keep producing a minimum volume to meet domestic demand as well as essential export obligations.
ISPA has asked the Deputy Minister of Commerce to hold an extraordinary meeting to discuss the power crisis. It has said it has a set of proposals for mitigating the problem which it is keen to discuss at the meeting.
Bahador Ihramian, the vice-president, ISPA, said electricity rationing reduces companies’ production and, in addition to unannounced outages, causes damage to equipment and production lines. The increase in electricity prices this year had increased the cost of producing steel in the country, and, in recent times, electricity shortages have become one of the major problems for producers.
Exports
Iran exports a substantial quantity of steel. However, due to power outages and production loss, exports are at risk.
In the first quarter, the performance was good, with exports at 1.62 million tonnes (mn t) for semi-finished products, up 55% y-o-y.
Billets and blooms had the lion’s share of semis exports with an aggregate of 1.06 mn t, 26% higher than in the previous corresponding period.
Slab exports stood at 563,000 tonnes (t) during the period, up 176% y-o-y.
The export of finished steel products jumped by 125% to 873,000 t during the three months under review.
Exports of direct-reduced iron increased by 1,505% y-o-y to 321,000 t, as per ISPA data.
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