Iran: Steel production falls y-o-y in Mar'21-Jan'22 amidst power, gas curbs

Iran's steel production in the first ten months of the current Persian Year (21 Mar'21-22 Jan'22) fell compared to the corresponding period of last year, according to recent data released by the Iranian Steel Producers Association (ISPA).

• The country produced 23.21 million tonnes (mnt) of semi-finished steel in Mar'21-Jan'22, down 8%, y-o-y. Billets and blooms accounted for 13.75 mnt of the total semi-finished output, a significant on year fall of 13% while slabs production was down marginally by 1% y-o-y to 9.46 mnt.
  
  
• The total production of finished steel stood at 16.4 mnt in the period under review, lower by 5%, y-o-y as against 17.2 mnt in the same period last year.
  
  
• Production of long and flat steel stood at 9.4 mnt and 6.99 mnt, down by 2% and 8%, respectively in this period.
  
  
• As per statistics released by ISPA, direct reduced iron (DRI) production stood at 25.8 mnt in Mar'21-Jan'22, up by 1%, y-o-y when compared to 25.5 mnt in CPLY.
  
  

The decline in production comes as steel mills were forced to lower power and natural gas consumption during the summer and winter seasons, respectively.

Towards the third week of January, SteelMint reported that Iran's five steel mills were struggling with the sudden power outages which are likely to impact their production volumes. The Tehran Regional Electricity Organisation notified the respective steel mills of restrictions on electricity from 22 Jan'22. The five companies (including rolling mills, induction furnaces and pig iron producers) were Rolling and Steel Parts Manufacturer Co, Industry Sarir Steel Co, Azarbaijan Pardis Trade Industry Co., Asia West Steel Co and Asia Bahman Chodan Steel Co.

The main reason behind the restriction was the lack of liquid fuel (diesel) in power plants in the northern part of the country which almost reached the critical range. Higher fuel consumption and supply constraints in northern Iran amid the cold weather forced the government to curtail supplies to steel mills.

However, the restrictions have been eased. As power curbs-related issues seem resolved, Iran may stimulate steel makers to increase production, sources informed SteelMint.