Written by Hamid Atharinejad
1. Reduced production and direct losses
In the year 1403 (up to March 10, 2025), Iran's steel production decreased by 6.7% compared to the previous year, and the semi-finished products sector, with a drop of about two million tons in production, lost approximately one billion dollars in added value.
Experts have also reported an estimated annual loss of around 4 billion dollars in the steel industry due to power outages.
2. Shutdown of half of industrial capacity
Power outages led to 50% of production capacity in industrial towns becoming inactive, which some interpreted as the complete shutdown of factories.
3. Short-term qualitative effects
Temperature fluctuations and power outages caused metallurgical issues, steel cracking, and reduced strength, which lowered product quality and significantly undermined exports.
4. Financial impacts and decline in stock market value
Large steel companies such as Mobarakeh Steel, Khuzestan Steel, and Hormozgan Steel, which make up about 12% of the total stock market capitalization, have experienced a decline in their stock prices due to reduced production and revenue.
5. Decline in export revenue
Steel exports in the first 11 months of the year 1403 amounted to about 27 million tons, generating revenue of 7 billion dollars, but the production decline could threaten Iran's position in the global market.
6. Waste of costs for restarting equipment
Frequent shutdowns have caused high costs for restarting furnaces and smart equipment, leading to a reduction in their useful lifespan.
7. Reduced liquidity and employee payment issues
Production line managers have reported cash flow problems and inability to pay workers' salaries, which has led to dissatisfaction, layoffs, and decreased employee motivation.
8. Increased production costs and decreased competitiveness
With inflation exceeding 40% and a decline in production efficiency, the total production cost and final price of steel have increased, weakening the industry's position in domestic and export markets.
9. Long-term effects of unbalanced development
Given the installed capacity of 55 million tons, actual production is about 30 million tons. The gap between capacity and production hinders accurate development planning and structural investment in the industry.
10. Major social and economic consequences
Frequent power and industrial gas outages, the increase in the number of closed factories, and the accumulation of corporate debts create conditions for social protests and pressure on the government.
Conclusion and Recommendations:
Immediate investment in electricity and gas infrastructure, upgrading the distribution network, and fuel storage (to reduce seasonal power outages)
2. Implementing tariff policies and increasing transparency in the energy sector to reduce the harmful burden on the industrial sector
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