ISPA: Energy shortages taking heavy toll on steel output capacity
The head of the Iranian Steel Producers Association (ISPA) stated that the country’s annual steel production capacity stands at 50 million tons, but due to energy shortages, only 30 million tons are being utilized.
Speaking at the inauguration of the 6th National Iranian Steel Festival and Exhibition on Tuesday, Bahram Sobhani highlighted that production limitations and the failure to maximize capacity stem from energy supply challenges, particularly shortages and disruptions in gas and electricity during various seasons.
He noted that the steel industry accounts for only 5% of the country’s gas consumption. If energy deficits are resolved, Iran could become the seventh steelmaker in the world by producing 36 million tons of steel annually.
Sobhani emphasized the localization of the steel industry, stating that domestic companies and producers have reduced reliance on imports by manufacturing components and equipment locally.
He added that steel festivals have fostered collaboration between new technology-based firms (NTBFs) and the steel industry, resulting in over 400 memoranda of understanding worth $1.7 billion signed so far.
Also, agreements worth 70 million euros are expected to be signed between steel companies and domestic producers by late March, the ISPA head noted.
Sobhani pointed out that 128 equipment manufacturing companies, half of which are NTBFs, are participating in this year’s exhibition.
He also unveiled the Iran National Atlas of Steel Industries, describing it as a roadmap for the country’s steel supply chain.
The atlas provides information on capacities, projects, and the status of production units, while also addressing optimal resource management, planning for the steel industry, and infrastructure development.
Additionally, a national platform has been launched to manage the needs and capabilities of steel producers and suppliers. The platform enables component manufacturers to assess and produce parts based on industry demands.
Sobhani highlighted that despite sanctions and energy imbalances, the steel industry generates approximately $8 billion annually in foreign exchange earnings.
He stressed the need to increase the industry’s share of non-oil exports to over 20 million tons, noting that steel accounts for 16% of Iran’s non-oil exports and plays a significant role in the national economy.
The ISPA head proposed designating January 12 as National Steel Day in the Iranian calendar, recognizing the industry’s importance to the country.
$2.5b saved through localization
Mohammad Aqajanlou, head of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), announced that $2.5 billion has been saved through domestic production of parts and equipment since 2020.
Speaking at the same event, Aqajanlou stated that indigenization in the steel industry has enabled the production of components using advanced technology. Plans are in place to save an additional $800 million this year through further localization.
The deputy minister of industry, mine, and trade added that a comprehensive steel industry platform, developed in collaboration with 1,430 domestic companies, has been launched.
The platform includes data on 27,000 localized parts and identifies 300 strategic needs prioritized for domestic production.
He emphasized that the platform has facilitated connections between steel producers and equipment manufacturers, enabling NTBFs to enter the steel industry, reduce costs, and increase foreign exchange earnings.
Aqajanlou stressed the importance of investing in engineering knowledge, technology, and domestic production to achieve sustainable development and enhance Iran’s position in the global steel industry.
He called for advancing green steel technologies to reduce emissions and align with global standards, noting that optimizing energy consumption is a top priority for the industry.
Aqajanlou also highlighted the importance of addressing bottlenecks in the industry and fostering collaboration between producers and consumers of components and equipment.
He mentioned the signing of a memorandum to improve standards in the steel sector and the implementation of major projects, such as utilizing waste energy from reduction units, which will help reduce imports in this field.