In October 2024, the Iranian Steel Producers Association reported a significant decline in steel production due to diminished electricity supplies. This shortfall has severely impacted output during the first half of the calendar year, which commenced in late March. Power cuts mandated for industrial sectors amid record-breaking summer temperatures resulted in a contraction of up to 10% in certain categories of steel production.
According to ISPA data, semi-finished steel production decreased by 5.7% year on year, totaling 14.38 million metric tons by September 21. This type of steel is essential for constructing long steel products that serve as foundational elements in infrastructure development. The most pronounced reduction occurred in the production of long steel products, plummeting to 5.709 million metric tons, an alarming 10% drop compared to the previous year.
Conversely, steel sheet production demonstrated resilience, with a 6% year-on-year increase, surpassing 5 million metric tons. Finished steel products saw a 3.3% decline, reaching 10.744 million metric tons in the same timeframe. Interestingly, Iran’s output of direct reduced iron, or sponge iron, rose by 10.2% to 20.784 million metric tons, reflecting some sectors' ability to adapt to the energy constraints.
However, the production of iron pellets fell by 4% year on year, totaling 31.920 million metric tons, while iron concentrate output increased by 7.3% to 33.499 million metric tons. This juxtaposition of rising and declining outputs underscores the complexities within Iran's steel industry as it grapples with the repercussions of energy shortages. The broader implications of these challenges could reverberate through Iran's infrastructure development and economic stability in the years to come.
