Power outages sounded the alarm for steelmakers – Tejaratnews
According to Tejarat News, the investigation of global prices of steel products shows that the steel market is at a critical trading point. So that the prices recorded low figures and the winner is with the seller who can control the market. In this case, the seller who has the ability to supply high tonnage of steel at a lower price will be the leader in the field. The graphs below show the world prices of three steel products.
Will the global steel market be handed over?
But it is more difficult for Iranian steelmakers. Because in the past weeks, power outages in industries have intensified and this issue has disrupted the production policies of factories. This issue was so serious that even some steelmakers sent their employees on compulsory leave. It should be seen in the current situation, what do steelmakers do with the problem of power outages? If the restrictions continue, will Iranian steelmakers have the ability to compete in global markets? Is not using the full capacity of steel making profitable for steel workers?
Alireza Tajbr, an expert on the capital market, said in relation to the current electricity restrictions: “Currently, all macro conditions of the country are against producers.” In addition to the issue of power outages in summer, steelmakers also have problems with energy supply in winter and struggle with gas outages. This issue has greatly affected the volume of production of steel companies.
But what should be done in the current situation? This capital market expert emphasized the imposition of this issue on Iran’s economy and stated: Currently, the government is expected to support production by creating platforms. But this has not happened in recent years; So that in addition to the increase in feed rates and bank interest, export duties have also quadrupled.
What is the solution?
According to Tajbar, the only way to overcome the current situation is to establish a power plant by steel workers, so that the problem of electricity limitation in the summer may be solved. But the risk of gas cut in winter still remains.
Examining the trend of steel production and other industries shows that the production of companies has always decreased in summer and winter. This issue has brought problems for companies that have to compete in the global markets and take over the market in a way.
This capital market expert confirmed this and added: Currently, steel companies do not use all their capacities and their actual production is lower than the nominal production capacity. This directly threatens the national economy.
Tajbr added: But the issue that we are currently facing, and the government has no involvement in it, is the reduction of gas pressure in winter, which was brought to a peak by Turkmenistan’s bad faith last year. This caused the country to face problems in the gas balance. In this situation, governments provide a series of incentives to maintain the competitive advantage of an industry in global markets. But the Iranian government not only does not do this, but the current behavior of the government is completely the opposite of this.
This capital market expert added: But one thing that can be hoped for is the launch of the gas field pressure boosting station in Lamard. This issue can somewhat solve the current gas problem, but the risk of gas restrictions for steel is unlikely to disappear at the moment.
Compulsory leave of steel production employees
The power outage of industries in recent days was such that some factories sent their employees on compulsory leave. In this regard, Tajbr said: Every factory in Orhal has to send its employees on compulsory leave. But this issue is normal for petrochemical companies due to their conditions and some production lines should be closed. But this is not the case in steelmakers; Because steel workers can work non-stop all day of the year. But the current situation is somewhat imposed and the steel factories are not to blame for it.
On the other hand, the issue of increasing the price of fuel gas in this industry is raised. At the same time as the feed price of petrochemicals gas increased, fuel gas also became more expensive and experienced a double growth. In this regard, this capital market expert said: This issue will be applied in the future and will cover all industries. But this gas, like feed gas, does not have a great impact on the finished price, the capital market has not reacted strongly to it at the moment.
In the current situation, the steel makers should overcome this crisis by any means possible. Because it is unlikely that energy problems will be solved in the near future. In this case, they should either think of establishing a power plant for themselves or adapt to the current conditions. In the meantime, it must be acknowledged that some metal and mining companies have started to establish power plants, and strangely, the government is asking for a share from these plants through a complicated process.
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