High summer demand has led to severe power and water shortages in the past few weeks in most parts of the country.
Power supply to steel and cement factories were subsequently restricted by Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) and only allowed to work at 50% of their capacity from 12-8 a.m. during the period.
The ban on the two key sectors created steel and cement shortages in local markets and prices increased, which created problems for most construction sectors.
“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,” Mohammad Hossein Motevalli-Zadeh, CEO of Tavanir, was also 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 [again].”
Due to extreme heat and the public’s failure to lower consumption, electricity supply to the steel industry faced problems since the past couple of days, he said recently.
Rasoul Khalifeh-Soltani, the head of Iranian Steel Producers Association, said at the peak of blackouts, power outages shut down 85% of steel production.
ISPA Statistics
According to the Iranian Steel Producers Association’s latest report, Iran’s steel output in the fourth month of the current fiscal year (June 22-July 22), registered a noticeable fall compared with the previous month and the same period of last year.
Iranian steelmakers produced 1.5 million tons of semi-finished steel in the fourth month of the current fiscal year (June 22-July 22), down 39.21% and 38.43% MOM and YOY respectively.
Billet and bloom made up 897,000 tons of semi-finished production, down 41.45% and 41.87% YOY and month-on-month respectively.
Slab output reached 604,000 tons to register a 33.33% decline year-on-year and 34.77% decline MOM.
The output of finished steel decreased by 41.05% YOY to 1.07 million tons, which is down 40.99% compared with the month before.
Long steel products’ share in the output of finished steel products stood at 565,000 tons, posting a 45.46% decline compared with the similar period of last year and 51.21% decline month-on-month.
Rebar production hit 458,000 down 46.24% YOY and down 94.72% MOM. It was followed by beams with 56,000 tons (down 51.72% YOY, down 50.44% MOM) and L-beam, T-beam and other types with 51,000 tons, down 25% and 35.44% YOY and MOM respectively.
The production of flat steel registered a 35.24% decline year-on-year and 23.11% month-on-month with 509,000 tons.
Hot-rolled coil made up 506,000 tons of the production in this category, indicating a 33.15% decline YOY and 21.91% MOM, followed by cold-rolled coil with 176,000 tons, down 19.63% MOM and down 29.31% compared with the same period of last year; and coated coil with 95,000, registering a decline of 35.81% and 28.57% YOY and MOM respectively.
According to the ISPA data, Iran's output of direct reduced iron stood at 1.83 million tons, down 25.36% year-on-year and down 42.31% MOM.
During the four months to July 22, a total of 9.58 million tons of semis were produced, down 4% YOY.
Billet and bloom made up 5.78 million tons of semi-finished production, down 5% YOY.
Slab output reached 3.79 million tons to register a 3% decline year-on-year.
The output of finished steel decreased by 6% YOY to 6.47 million tons.
Long steel products had 3.66 million-ton share in the output of finished steel products, posting a 1% decline compared with the similar period of last year.
Rebar production stood at 3 million tons (down 8% YOY). It was followed by beams with 374,000 tons (down 9% YOY) and L-beam, T-beam and other types with 283,000 tons (up 8% YOY).
Production of flat steel with 2.8 million tons registered a 11% decline in the four-month period.
Hot-rolled coil made up 2.76 million tons of the production in this category, showing a 10% decline compared with the similar period of last year, followed by cold-rolled coil with 826,000 tons, down 9% compared with the same period of last year; and coated coil with 493,000 (up 5%).
Iran's output of direct reduced iron stood at 10.06 million tons unchanged from last year, ISPA data shows.
Global Standing Likely to Change
Iranian steel mills produced a total of 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.
The world’s 64 steelmakers produced 1 billion tons of steel over the six months under review, up 14.4% YOY. States located in Asia and Oceania collectively produced 737 million tons of the total.
The Middle East produced 24.1 million tons of crude steel in the six months under review, posting an increase of 8.7% compared with the same period of last year.
Global steel output also experienced a 11.6% growth in June to 167.9 million tons.
World's major steel producers seem to have recovered their output in 2021, after the global closure of businesses and disruption in industrial operations, as a result of Covid-19 transmission in early 2019.
Crude steel is defined as steel in its first solid (or usable) form: ingots and semi-finished products (billets, blooms and slabs). This is not to be confused with liquid steel, which is steel poured.
The World Steel Association is one of the largest and most dynamic industry associations in the world, with members in every major steel-producing country. Worldsteel represents steel producers, national and regional steel industry associations and steel research institutes. Members represent around 85% of global steel production.
The 64 countries included in this table represent 85% of global steel production.
Iranian steel mills produced 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.
Located in southwestern Isfahan, Mobarakeh Steel Company is the biggest steel producer in Iran and the Middle East and North Africa region.
The recent power outages are expected to cause a drastic reduction in steel production and a decline in Iran’s standing as the world’s 10th biggest steelmaker.
