The upcoming summer will once again face power rationing issues for Iranian steel manufacturers. However, the expected power outages this year and their negative impact on steel production are slightly better than before, and the Iranian government has proposed several options to alleviate the pressure faced during the hot and challenging season. However, power supply interruptions will occur regardless and will lead to an increase in the prices of major steel commodities.
The Iranian government is trying to find a better way to manage power outages and minimize their negative impacts, in order to avoid the traditional decline in steel production that Iran has experienced during the summer.
Some market participants have commented that Iran will experience natural gas interruptions in winter and power interruptions in summer, which usually disrupt production. However, this will not lead to a serious shortage of steel products in the market or disrupt the supply and demand balance. However, producers may use this as an excuse to increase prices.
Iranian steel producers are developing a plan to overcome this challenging period of power rationing with minimal losses. Assuming that the steelmaking operation is the most energy consuming, it may become the bottleneck of production. Iran steel plant is considering more feasible direct reduced iron sales trade.
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