Iranian Steel Mills Facing Reduction of Power Supply: Tavanir CEO Warns

EghtesadOnline: The Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) has warned that it will have to cut down on its electricity supply to steel mills, if public consumers fail to cooperate and lower their power consumption.

News ID: ۷۸۶۸۳۸

10 August 2021

“Due to extreme heat and the public failure to lower consumption, there were problems with electricity supply to the steel industry in the past couple of days,” Mohammad-Hossein Motevalli-Zadeh, CEO of Tavanir, said.

“We have gone through the last few weeks without any restrictions [in supplying electricity to steel mills] since the media succeeded in raising awareness [about the need to save energy] and the industries cooperated,” he was quoted as saying by Mehr News Agency.

But he insisted that if people do not cooperate, “we may have to limit the consumption of some steel industries”.

According to the official, some of the steel producers in Iran are engaged in supplying oxygen for Covid-19 patents.

Summer demand caused severe power and water shortages in the past weeks in most regions, resulting in blackouts and dry taps. As a result, steel and cement factories were only allowed to operate at 50% of their capacity from 12-8 a.m.

The abrupt ban on the two key sectors created shortages in the local market and prices increased, creating new problems for most construction sectors.

Rasoul Khalifeh-Soltani, the head of Iranian Steel Producers Association, said at the time that the power outages and blackouts shut down 85% of the steel industry’s production.

Major Mining Firms

Heavyweight mining firms suffered 100 trillion rials ($389 million) in lost sales during the first four months of the current fiscal year (March 21-July 22), a new report released by the Iranian Mines and Mining Industries Development and Renovation Organization shows.

Mobarakeh Steel Company, the biggest steelmaker in Iran and the Middle East and North Africa region, saw the highest volume of sales during the period with 450 trillion rials ($1.75 billion), up 157% YOY.

Iranian steel mills produced 15 million tons of crude steel in the first six months of 2021, which indicate an 8% rise compared with the corresponding period of 2020.

The World Steel Association’s latest report shows Iran's June output stood at 2.5 million tons, up 1.9% year-on-year.

The report ranks Iran the world’s 10th biggest crude steel producer. China was the world’s largest crude steel producer in H1 with 563.3 million tons of steel output, up 11.8% YOY.

It was followed by India with 57.9 million tons (up 31.3%), Japan with 48.1 million tons (up 13.8%), the United States with 42 million tons (up 15.5%), Russia with 38.2 million tons (up 8.5%), South Korea with 35.2 million tons (up 8.3%), Germany with 20.6 million tons (up 18.1%) and Turkey with 19.7 million tons (up 20.6%).

Iran is placed after Brazil (ninth) with 18.1 million tons, 24% higher than the corresponding period of 2020.

Iranian steel mills produced a total of 29.02 million tons of crude steel in 2020, which indicate a 13.35% rise compared with 2019, the highest growth in output in the list of the world's top 10 producers.

Mobarakeh Steel Company is located in southwestern Isfahan.