Electricity limitations in 2024 have had significant impacts on Iran’s steel production chain. These limitations, resulting from inappropriate electricity distribution policies, especially during high-demand seasons, have led to reduced production, decreased revenue, and jeopardized the sustainability of this strategic industry.
Production reduction across all sectors.
Electricity limitations have led to a reduction of 776,000 tons in production during the second quarter of 2024, which is equivalent to a 7% decrease compared to the first quarter. This reduction is observed across the entire steel production chain, from raw materials such as billets, blooms, and slabs to final products like rebar, hot-rolled, and cold-rolled sheets.
Widespread economic loss.
The value of lost production due to these limitations is estimated to be around 1.758 trillion rials. This loss has not only impacted producers but has also negatively affected the entire economy of the country, including the supply chain, domestic markets, and exports.
Uneven impact on different products.
- Final products such as rebar and I-beams have experienced the greatest decline in production, with rebar production decreasing by 25% to 1.458 million tons, and I-beam production dropping by 27% to 217,000 tons.
- Intermediate products such as billets and blooms have experienced a smaller reduction (around 4%), but due to the high volume of production, they have a significant financial impact.
Electricity limitations, as one of the major challenges facing the steel industry in 2024, have not only led to reduced production and economic losses but also pose a threat to the sustainability of this strategic industry. Immediate action is required to improve electricity infrastructure and manage energy consumption to prevent the recurrence of this crisis in the coming years.
Steel World Review
